The Vanguard Dividend Appreciation ETF and the Schwab U.S. Dividend Fairness ETF Revenue are among the many high dividend ETFs to earn years of passive revenue.
SCHD presents a a lot greater dividend yield however trails VIG in latest complete returns.
VIG has broader diversification with over 3 times as many holdings and focuses on dividend progress.
The Vanguard Dividend Appreciation ETF (NYSEMKT:VIG) and the Schwab U.S. Dividend Fairness ETF(NYSEMKT:SCHD) are each dividend-focused exchange-traded funds (ETFs), concentrating on U.S. firms with a robust document of paying dividends. Their approaches and sector exposures, nevertheless, diverge meaningfully by way of yield, sector tilt, and portfolio breadth, with VIG providing wider diversification and SCHD offering the next revenue payout.
The comparability beneath breaks down how these funds stack up on value, efficiency, danger, and portfolio development to assist traders determine which can higher match their objectives.
Metric
VIG
SCHD
Issuer
Vanguard
Schwab
Expense ratio
0.05%
0.06%
1-yr complete return (as of Dec. 19, 2025)
14.9%
6%
Dividend yield
1.6%
3.8%
Beta
0.79
0.73
AUM
$120.4 billion
$72.5 billion
Beta measures worth volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents complete return over the trailing 12 months.
Each funds are low-cost, with SCHD charging only a hair extra, however SCHD stands out for its a lot greater dividend yield and will probably enchantment to these prioritizing revenue over latest complete returns.
Metric
VIG
SCHD
Max drawdown (5 y)
(20.4%)
(16.8%)
Progress of $1,000 over 5 years (by way of complete returns)
$1,721
$1,530
The Schwab U.S. Dividend Fairness ETF holds a 14.2-year observe document. The ETF tracks the Dow Jones U.S. Dividend 100 Index, specializing in 103 high-yielding, high-quality U.S. shares. Its sector combine is closely weighted in direction of vitality (19.3%), client defensive (18.5%), and healthcare (16.1%). Prime holdings embrace Merck & Co(NYSE:MRK), Amgen(NASDAQ:AMGN), and Cisco Techniques(NASDAQ:CSCO). This concentrated strategy could enchantment to these in search of a focused, income-oriented portfolio.
The Vanguard Dividend Appreciation ETF tracks the S&P U.S. Dividend Growers Index, which contains shares which have raised their dividends for no less than 10 consecutive years. It is a huge portfolio of 338 shares, with an emphasis on large-cap companies which have a constant historical past of dividend progress. Its sector publicity is tilted towards expertise (27.8%), monetary companies (21.4%), and healthcare (16.7%), with main positions in Broadcom(NASDAQ:AVGO), Microsoft(NASDAQ:MSFT), and Apple(NASDAQ:AAPL). The broader diversification and tech tilt could entice growth-minded traders.
For extra steerage on ETF investing, take a look at the complete information at this hyperlink.
Investing in dividend ETFs is a simple and low-cost option to generate passive revenue for years with out the necessity and experience to investigate and purchase particular person shares. The Vanguard Dividend Appreciation ETF and the Schwab U.S. Dividend Fairness ETF are among the many high dividend ETFs on the market, with each specializing in shares that pay extremely dependable and sustainable dividends.
SCHD’s dividend yield of three.8% is greater than twice that of VIG’s. That is as a result of the SCHD fund focuses on high-yield dividend shares, however they’re additionally all constant dividend payers. That filters out firms that pay a excessive yield however could not have the ability to assist it. Most of its high holdings supply yields of three% or greater.
VIG, in distinction, is much less about yields and extra about dividend progress. The underlying index fund (the S&P U.S. Dividend Growers Index) defaults to excluding the highest 25% highest-yielding firms to take away probably unstable dividend-paying firms. As an alternative, VIG contains solely firms with no less than a 10-year steady streak of dividend will increase.
This is probably the most curiosity half. Revenue traders usually base their choices on yield. Nevertheless, VIG is proof of how dividend progress shares, with reinvested dividends, can usually outperform even high-yielding shares in the long run.
To be truthful, VIG’s considerably bigger portfolio additionally contributes to its complete returns. General, traders in search of extra steady and bankable dividends that additionally develop yr after yr could desire VIG over SCHD.
Dividend yield: Annual dividends paid by a fund or inventory divided by its present worth, proven as a proportion. Expense ratio: Annual charge, expressed as a proportion of property, {that a} fund costs to cowl working prices. Beta: A measure of an funding’s volatility in comparison with the general market, usually the S&P 500. Max drawdown: The most important proportion drop from a fund’s peak worth to its lowest level over a selected interval. Asset below administration (AUM): Complete market worth of property that an funding fund manages on behalf of traders. Sector tilt: When a fund has higher publicity to sure industries or sectors in comparison with the broader market. Dividend progress: The constant enhance in dividend funds by an organization or fund over time. Giant-cap: Corporations with a big complete market worth, typically over $10 billion in market capitalization. Index: A benchmark that tracks the efficiency of a gaggle of securities, usually used as a reference for funds. Portfolio development: The method of choosing and weighting property inside a fund to realize particular funding objectives. Complete return: The funding’s worth change plus all dividends and distributions, assuming these payouts are reinvested. Drawdown: The decline in worth from a fund’s highest level to its lowest earlier than a brand new peak is reached.
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Neha Chamaria has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Amgen, Apple, Cisco Techniques, Merck, Microsoft, and Vanguard Dividend Appreciation ETF. The Motley Idiot recommends Broadcom and recommends the next choices: lengthy January 2026 $395 calls on Microsoft and brief January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure coverage.
