Which is better VIG or SCHD?
The main difference between SCHD and VIG is how they select holdings. VIG looks for companies with dividend appreciation for 10 years while SCHD looks for companies that just pay a dividend. However, SCHD still has a higher dividend yield and better performance compared to VIG.
SCHD is a very popular and successful dividend ETF. Some of its biggest advantages are its liquidity, extremely low cost, and totally passive diversification. We dig into three other reasons to buy this ETF as well as three reasons to sell it and then offer our approach.
SCHD has delivered substantially greater returns than VYM over this relatively short time period with roughly the same volatility and a slightly smaller max drawdown. Consequently, SCHD delivered a much higher risk-adjusted return.
With about 267 holdings, it effectively diversifies company-specific risk. Vanguard Dividend Appreciation ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
Performance Analysis
VIG's long-term performance is excellent. Ten-year risk-adjusted returns, as measured by the Sharpe Ratio, are second only to SCHD among dividend ETFs, and since its inception in April 2006, VIG has gained an annualized 9.55% compared to 9.77% for SPY.
...
Zacks Premium Research for SCHD.
| Zacks Rank | Definition |
|---|---|
| 1 | Strong Buy |
| 2 | Buy |
| 3 | Hold |
| 4 | Sell |
| Close | Chg | Chg % |
|---|---|---|
| $77.24 | 1.15 | 1.51% |
VTI offers stable returns with more diversification and at a lower cost. SCHD offers higher dividend income with more risk/volatility and at a slightly higher cost.
...
| SCHD | SPYD | |
|---|---|---|
| Management Style | passive (index-based) | passive (index-based) |
| Dividend Yield | 3.44% | 4.11% |
| Underlying Index | Dow Jones U.S. Dividend 100 Index | S&P 500 High Dividend Index |
| YTD Return | -9.21% | -2.62% |
This fund's focus on fundamentals promotes durable yield, as stocks on firm financial footing are well-positioned to continue dividend policies. It also allows the fund to tap into the quality factor, which has historically been tied to market-beating performance.
What is better VYM or vig?
In short, VIG has handily beaten VYM on every metric since inception – higher return, lower volatility, smaller drawdowns, and considerably higher risk-adjusted return (Sharpe). Over that same time period, VYM also underperformed an S&P 500 index.
...
25 high-dividend ETFs.
| Symbol | ETF name | Annual dividend yield |
|---|---|---|
| IVV | iShares Core S&P 500 ETF | 3.75% |
| VOO | Vanguard S&P 500 ETF | 2.69% |
| VTI | Vanguard Total Stock Market ETF | 2.46% |
| VTV | Vanguard Value ETF | 2.41% |
In short, VIG has handily beaten VYM on every metric since inception – higher return, lower volatility, smaller drawdowns, and considerably higher risk-adjusted return (Sharpe). Over that same time period, VYM also underperformed an S&P 500 index.
Schwab U.S. Dividend Equity ETF (SCHD)
SCHD has a dividend yield of 3.19% and paid $2.43 per share in the past year. The dividend is paid every three months and the last ex-dividend date was Jun 22, 2022.
DGRO - Dividend Analysis
Dividend growth during 2021 was quite strong, with the fund's quarterly dividends growing by 14% from early 2021 to late 2021. DGRO's strong dividend growth track record is a significant benefit for the fund and its shareholders, and the fund's core investment thesis.
