HDV vs. SCHD: Which Dividend ETF Is the Better Buy?
SCHD and HDV are two leading high-dividend ETFs. This article compares their strategies, holdings, and risks to help investors decide which one fits their portfolio.
The Schwab U.S. Dividend Equity ETF (SCHD) and the iShares Core High Dividend ETF (HDV) are two of the most popular high-yield equity ETFs. Both aim to provide regular income, but they differ in stock selection and sector focus.
Overview of the Funds
SCHD
SCHD tracks the Dow Jones U.S. Dividend 100 Index, which includes 100 companies with sustainable dividends and strong fundamentals. It emphasizes dividend growth and return on equity.
HDV
HDV tracks the Morningstar Dividend Yield Focus Index, targeting high-yield stocks with reasonable valuations. It leans toward defensive sectors like utilities and energy.
Performance and Risk Comparison
| Feature | SCHD | HDV |
|---|---|---|
| Current Yield | ~3.5% | ~4.2% |
| Expense Ratio | 0.06% | 0.08% |
| Top Sectors | Technology, Healthcare, Financials | Energy, Utilities, Consumer Staples |
| Dividend Growth | Historically higher | Lower but more stable |
What This Means for Investors
The choice depends on your goals: if you seek higher current income with stability, HDV may be suitable. If you prefer dividend growth and less cyclical exposure, SCHD could be a better fit. Diversification across both may also be considered.
Frequently Asked Questions
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