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 gives a a lot greater dividend yield however trails VIG in current complete returns.
VIG has broader diversification with over thrice as many holdings and focuses on dividend development.
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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 powerful file of paying dividends. Their approaches and sector exposures, nevertheless, diverge meaningfully when it comes to 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, threat, and portfolio building to assist traders determine which can higher match their targets.
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 value 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 doubtlessly attraction to these prioritizing revenue over current complete returns.
Progress of $1,000 over 5 years (when it comes to complete returns)
$1,721
$1,530
The Schwab U.S. Dividend Fairness ETF holds a 14.2-year observe file. 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 power (19.3%), shopper defensive (18.5%), and healthcare (16.1%). High holdings embody Merck & Co(NYSE:MRK), Amgen(NASDAQ:AMGN), and Cisco Methods(NASDAQ:CSCO). This concentrated method could attraction to these looking for a focused, income-oriented portfolio.
The Vanguard Dividend Appreciation ETF tracks the S&P U.S. Dividend Growers Index, which includes 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 development. 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 steering on ETF investing, try the complete information at this hyperlink.
Investing in dividend ETFs is a straightforward and low-cost method to generate passive revenue for years with out the necessity and experience to research 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 be capable 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 development. The underlying index fund (the S&P U.S. Dividend Growers Index) defaults to excluding the highest 25% highest-yielding firms to take away doubtlessly unstable dividend-paying firms. As an alternative, VIG contains solely firms with no less than a 10-year steady streak of dividend will increase.
Here is essentially the most curiosity half. Revenue traders typically base their selections on yield. Nonetheless, VIG is proof of how dividend development shares, with reinvested dividends, can typically outperform even high-yielding shares in the long run.
VIG Chart
VIG knowledge by YCharts
To be truthful, VIG’s considerably bigger portfolio additionally contributes to its complete returns. Total, traders looking for extra secure and bankable dividends that additionally develop yr after yr could choose VIG over SCHD.
Dividend yield: Annual dividends paid by a fund or inventory divided by its present value, proven as a share. Expense ratio: Annual charge, expressed as a share of property, {that a} fund prices to cowl working prices. Beta: A measure of an funding’s volatility in comparison with the general market, sometimes the S&P 500. Max drawdown: The most important share drop from a fund’s peak worth to its lowest level over a selected interval. Asset underneath administration (AUM): Complete market worth of property that an funding fund manages on behalf of traders. Sector tilt: When a fund has better publicity to sure industries or sectors in comparison with the broader market. Dividend development: The constant enhance in dividend funds by an organization or fund over time. Massive-cap: Firms with a big complete market worth, usually over $10 billion in market capitalization. Index: A benchmark that tracks the efficiency of a bunch of securities, typically used as a reference for funds. Portfolio building: The method of choosing and weighting property inside a fund to attain particular funding targets. Complete return: The funding’s value 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 Methods, 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 quick January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure coverage.
The Finest Dividend ETF to Purchase: SCHD Pays a Excessive Yield Whereas VIG Focuses on Dividend Progress was initially revealed by The Motley Idiot
