- SCHD
- VIG
- VYM
Quick Read
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SCHD’s per-share payout surged from $0.12 to $1.01 annualized since 2011, leaving VIG behind on yield-on-cost despite both funds posting similar total price returns.
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SCHD’s annual reconstitution acts as a hidden dividend-growth ratchet, continuously rotating toward companies still raising payouts and compounding income for long-term holders.
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VYM delivers higher current income for retirees spending now, while VIG’s four-basis-point fee and strict growth screen make it the anchor choice for accumulation-phase investors.
When Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) opened for trading on October 20, 2011, at a split-adjusted $5.22 per share, dividend ETF investors already had Vanguard Dividend Appreciation ETF (NYSEARCA:VIG) and Vanguard High Dividend Yield ETF (NYSEARCA:VYM) as the incumbent choices. Schwab’s newcomer entered a category Vanguard had defined.
Nearly fifteen years later, an untouched $10,000 stake in SCHD from launch day now throws off a yield on cost that no fresh dividend purchase can realistically approach. Shares recently changed hands near $35, a 567% cumulative price return before counting a single reinvested distribution. Per-share payouts have climbed from $0.1217 at the first quarterly payment to a $1.01 annualized forward rate. That progression is what this article is really about.
What SCHD Actually Owns Today
SCHD tracks the Dow Jones U.S. Dividend 100 Index, a screen that filters for consistent dividend payers with strong quality metrics and then weights them by a blend of cash flow, yield, and payout coverage. The output is a book of large, cash-generative businesses without the yield-trap problem that plagues pure high-yield indexes.
Current positioning reflects that discipline. QUALCOMM sits at the top at 6.7% of net assets, followed by Texas Instruments at 5.9% and UnitedHealth Group at 5.1%. Staples anchors like Coca-Cola, Procter & Gamble, and PepsiCo sit alongside energy majors Chevron and ConocoPhillips, mixing defensive cash flows with cyclical dividend growers. Fund assets sit near $94.9 billion, placing SCHD among the largest dividend ETFs by scale.
A $1,000,000 Income Portfolio
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