SCHD vs DVY: Head-to-Head Comparison

Side-by-Side Comparison

Key Differences Between SCHD and DVY

SCHD (Schwab U.S. Dividend Equity ETF) is a u.s. large-cap dividend fund managed by Charles Schwab. SCHD focuses on high-quality U.S. companies with strong track records of paying and growing dividends. It uses a rules-based approach to select about 100 stocks that have consistently paid dividends for at least 10 years. Beginners who want both income and growth often find SCHD attractive because it combines a solid dividend yield with quality stock selection at a very low cost.

DVY (iShares Select Dividend ETF) is a high dividend fund managed by BlackRock. DVY tracks the Dow Jones U.S. Select Dividend Index, focusing on U.S. companies with a strong track record of consistently paying dividends. It screens for dividend yield, payout ratio, and dividend growth history to find reliable income producers. The fund tends to favor utilities, financials, and consumer staples companies that prioritize returning cash to shareholders.

The most notable differences are in fees (0.06% vs 0.38%), number of holdings (103 vs 100), and 5-year returns (12.10% vs 7.00%).

Holdings Overlap Analysis

SCHD and DVY share only 5% of their top holdings. These funds are quite different, making them complementary choices if you want broader market coverage.

Cost Comparison Over Time

If you invest $10,000 and hold for 20 years (assuming 8% annual returns):

Over 20 years, the fee difference amounts to $2,658 on a $10,000 investment. SCHD saves you more in fees over time.

Which One Should a Beginner Choose?

Choose SCHD if: You want income-focused investors who want a reliable and growing dividend stream, conservative investors who prefer lower volatility with quality companies, retirees or pre-retirees building a dividend income portfolio. It's managed by Charles Schwab with an expense ratio of 0.06%.

Choose DVY if: You want retirees who need consistent income from their investment portfolio, income-focused investors willing to pay a higher expense ratio for specialized dividend screening, conservative investors seeking lower-volatility equity exposure through dividend stocks. It's managed by BlackRock with an expense ratio of 0.38%.

Can You Own Both SCHD and DVY?

Absolutely! With only 5% overlap, SCHD and DVY complement each other well. A simple portfolio might allocate 60% to one and 40% to the other, or you could pair them with a bond ETF like BND for a complete three-fund portfolio.

Frequently Asked Questions