If you're deciding between SCHD and DGRO for long-term investing, here’s the key takeaway:
- SCHD (Schwab US Dividend Equity ETF) focuses on high-yield, reliable dividend-paying U.S. companies. It offers a higher current yield (3.34%) and a lower expense ratio (0.06%), which may appeal to those seeking income stability and reinvestment opportunities.
- DGRO (iShares Core Dividend Growth ETF) emphasizes companies with consistent dividend growth (5+ years of increases) and broader diversification (400+ holdings). It has a lower yield (1.98%) but slightly stronger 10-year returns (14.56%) and lower volatility, favoring growth-oriented investors.
Quick Comparison
| Feature | SCHD | DGRO |
|---|---|---|
| Expense Ratio | 0.06% | 0.08% |
| Dividend Yield | 3.34% | 1.98% |
| Holdings | ~100 | ~400 |
| 5-Year Dividend Growth Rate | 10.6% | 9.2% |
| 10-Year Annualized Return | 13.72% | 14.56% |
| Sector Focus | Energy, Consumer Staples | Technology, Financials |
| Volatility | Higher | Lower |
Choose SCHD if you prioritize higher income today and stability. Choose DGRO if you're aiming for long-term growth with lower risk.
Performance data, yield, and risk statistics are based on historical information and do not guarantee future results.
SCHD vs DGRO ETF Comparison: Key Metrics and Performance Data
Key Metrics Comparison
When it comes to costs, both ETFs are among the most affordable in their category. SCHD charges an annual expense ratio of 0.06%, while DGRO's is slightly higher at 0.08%. Investing $10,000 in SCHD costs just $6 per year, compared to $8 with DGRO. Over 30 years, these differences add up: SCHD's total fees would be $1,663.61, while DGRO's would reach $2,212.13—a difference of $548.52.
"Fees are one of the biggest killers of portfolio growth. The difference between a 2% fee and a 0.04% fee over 30 years can result in your portfolio having half the total value!"
The dividend yield difference is also notable. SCHD offers a trailing 12-month yield of 3.31% to 3.34%, compared to DGRO's 1.96% to 1.98%. This yield difference impacts immediate cash flow for investors who reinvest dividends or rely on them for income.
Expense and yield statistics are provided for informational purposes and may change over time.
| Metric | SCHD | DGRO |
|---|---|---|
| Expense Ratio | 0.06% | 0.08% |
| Dividend Yield (TTM) | 3.31%–3.34% | 1.96%–1.98% |
| Number of Holdings | ~100 | ~400 |
Dividend Growth Rates and Compounding
Dividend growth can be a key factor in long-term compounding. SCHD has a higher 5-year dividend growth rate of 10.6%, compared to DGRO’s 9.2%. DGRO’s broader portfolio of approximately 400 holdings provides more exposure to growth-oriented sectors, which has contributed to its 10-year annualized return of 14.56%, compared to SCHD's 13.72%.
Dividend growth rates and returns are historical and may not reflect future outcomes.
Historical Performance and Returns
DGRO has outpaced SCHD in total returns over longer periods, but performance varies with market conditions. Over the last decade, DGRO delivered an annual return of 14.56%, while SCHD was at 13.72%. In some years, SCHD may outperform DGRO, depending on sector dynamics.
Past performance does not guarantee future returns.
Volatility and Risk
DGRO has delivered stronger long-term performance with less volatility. Its overall volatility is 3.17%, lower than SCHD's 3.79%. SCHD has shown resilience in certain downturns; for example, during the March 2020 COVID-19 crash, SCHD's maximum drawdown was 33.37%, compared to DGRO's 35.10%.
Volatility and drawdown figures are historical; all investments carry risk, including loss of principal.
DGRO vs SCHD: $100k in → Which ETF Is better?
Investment Strategies and Holdings
Each ETF's strategy plays a crucial role in defining its potential for long-term growth, complementing the performance and risk metrics previously discussed.
SCHD: Dividend Stability and High Yield
SCHD follows the Dow Jones U.S. Dividend 100 Index, focusing on companies with strong dividend histories and high yields. Its portfolio is concentrated, holding about 100 stocks, with the top 10 positions accounting for roughly 40% of the total. SCHD uses a selection process that evaluates cash flow, return on equity, dividend yield, and five-year dividend growth rates, and rebalances quarterly.
DGRO tracks the Morningstar US Dividend Growth Index, targeting companies with at least five consecutive years of dividend growth and excluding the top 10% of highest-yielding stocks. DGRO has over 400 stocks, with its top 10 positions making up about 26% of the portfolio. DGRO uses dividend dollars for weighting and leans toward growth-oriented sectors.
Holdings and strategies are subject to change.
Sector Allocations and Risk Profiles
Sector Weightings and Growth Focus
SCHD leans into defensive, high-yield sectors such as Energy, Consumer Staples, and Health Care. DGRO allocates more to growth sectors like Information Technology and Financials and includes major players like Apple and Microsoft. Both ETFs have a high correlation (0.94), so their performance often moves in tandem, despite different sector focuses.
Sector allocations can change over time and affect performance.
| Sector | SCHD Focus | DGRO Weight |
|---|---|---|
| Financials | High | 20.1% |
| Health Care | Top 3 | 17.0% |
| Information Technology | Lower | 15.5% |
| Consumer Staples | Top 3 | 12.9% |
| Industrials | High | 12.5% |
| Energy | Top 3 | 6.0% |
Which ETF for Long-Term Compounding?
SCHD offers a higher current yield (around 3.34%–3.9%), while DGRO has slightly outpaced it in 10-year annualized returns (14.56% vs. 13.72%). Your choice depends on whether you prioritize immediate income or long-term growth.
No guarantee can be made about future performance or income.
Using Mezzi to Optimize Your Choice
Mezzi’s portfolio tools can help you identify hidden overlaps, sector exposures, and tax considerations. SCHD’s higher yield may lead to more taxable income, which could be best suited for tax-advantaged accounts, while DGRO’s strategy may defer taxes. Mezzi tools can help you avoid issues such as wash sales and optimize your strategy.
Mezzi is an SEC-registered investment adviser. Use of its tools does not guarantee results.
FAQs
Can I hold both SCHD and DGRO together?
- Yes, holding both can offer some diversification, but performance will be closely correlated.
Which is better in a taxable account vs an IRA/401(k)?
- SCHD’s higher yield may be more suitable for tax-advantaged accounts. DGRO’s lower yield and growth focus may benefit taxable accounts, but individual circumstances vary.
How often do SCHD and DGRO rebalance, and why does it matter?
- Both rebalance quarterly.
Consult a qualified tax professional for personalized advice.
Related Blog Posts
- SCHD vs VYM: dividend growth vs current yield for retirees.
- DIVO vs SCHD: fees, dividend stability, and total-return differences.
- SCHD/VYM/DGRO head-to-head: dividend yields, 5/10-year dividend growth, fees, and top-10 overlap.
- SCHD vs VYM vs DGRO vs DIVO - Best dividend ETF for income + dividend growth
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