Which Dividend ETF Is Better for Income: Schwab's SCHD or Vanguard's VYM?
Vanguard's lower 0.04% expense ratio and 589-stock portfolio offer broader diversification, while Schwab's 3.1% yield appeals to income-focused investors.
Overview
Schwab U.S. Dividend Equity ETF (NYSEMKT:SCHD) offers a higher trailing yield and stronger recent returns, while Vanguard High Dividend Yield ETF (NYSEMKT:VYM) provides lower fees and broader diversification.
These two funds are among the most popular choices for investors seeking consistent income from domestic equities. While both target companies with a history of high payouts, they use different screening criteria that result in distinct portfolio behaviors. Total assets under management (AUM) for both funds exceed $100 billion, reflecting their status as core holdings for many dividend-focused investors. By examining their cost structures and sector tilts, investors can determine which strategy better aligns with their long-term objectives.
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
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Originally published at www.fool.com.