4 Reasons This Dividend ETF May Outperform Schwab's ETF for Income Investors
There's a high-quality dividend ETF building an equally strong investment case.
Overview
When asked to choose one dividend exchange-traded fund (ETF) above all others, the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is probably the most popular answer. It's a great answer, too, because the fund's comprehensive selection strategy does a really good job of picking the best dividend stocks.
That doesn't always mean it's going to be an outperformer, though. Shareholders found that out the hard way in 2023-2025 when it was actually one of the worst-performing dividend ETFs.
Details
There are times when other dividend ETFs are going to beat it. I think the iShares Core Dividend Growth ETF (NYSEMKT: DGRO) is a good candidate to do just that during the next few years. A hawkish Federal Reserve, an elevated inflation rate, and higher Treasury yields could be a combination that hurts stocks that aren't increasing their dividends.
Source
Originally published at www.fool.com.