You'll find a load of household names in this Vanguard fund. By Kaitlin Pitsker, Associate Editor From Kiplinger's Personal Finance, May 2013 Investors are enamored with the strategy of buying stocks with ever-increasing payouts. So it's no surprise that Vanguard Dividend Appreciation ETF has become the largest dividend-oriented exchange-traded fund. As its name suggests, Dividend Appreciation invests in companies with a history of regular distribution boosts. "Most ETFs try to entice investors with the largest dividend yields," says Jim Rowley, an analyst at Vanguard. "With VIG, that’s not the goal. It strives for consistent dividend growth."See Also: 6 Stocks Paying Dividends for the First Time The ETF tracks the Dividend Achievers Select index, a subset of Mergent’s Broad Dividend Achievers index that was created for Vanguard. The Broad index contains nearly 200 companies that have hiked their payouts at least once a year over the past decade. The aim of the Select index is to identify companies in the Broad index that are likely to continue to boost dividends. The Select index also excludes real estate investment trusts, which are found in the Broad index. Dividend Appreciation “fully replicates” the Select index, says Rowley. The portfolio tilts heavily toward consumer-oriented firms, such as McDonald’s and Target. But the stakes in financial and health care stocks, 7% each, are much smaller than those in other big-company blend funds (those that invest in stocks with a blend of growth and value attributes). Over the past year, the ETF beat the average large-company blend fund by one percentage point.