SCHD vs. VIG: Which Dividend ETF Could Build More Wealth Over 20 Years?

1 month ago 34

David Dierking, The Motley Fool

Tue, July 28, 2026 astatine 7:38 AM CDT 4 min read

Over the past decade, the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) has generated an mean yearly instrumentality of 12.4%. The Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) has returned 12.8% annually implicit the aforesaid clip frame.

That's not overmuch of a difference. But 1 shouldn't spot akin show records and presume the funds themselves are akin oregon adjacent interchangeable.

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These 2 dividend ETFs instrumentality precise antithetic approaches to portfolio construction. There's precise small overlap betwixt the 2 portfolios, and assemblage compositions uncover immoderate precise chiseled differences successful tilts.

SCHD screens for beardown equilibrium expanse wellness and precocious yield, portion giving immoderate information to dividend growth. VIG screens wholly based connected dividend maturation history.

Each has its chiseled advantages and disadvantages. But if I'm looking to clasp conscionable 1 of these funds implicit the adjacent 20 years, I judge 1 decidedly has a amended accidental astatine outperforming.

A jar of coins, folded dollar bills, and a motion saying "dividends".

The lawsuit for SCHD

The Schwab U.S. Dividend Equity ETF tracks the Dow Jones U.S. Dividend 100 Index. It screens U.S. large-cap stocks by factors including currency flow-to-debt, instrumentality connected equity, dividend yield, and dividend maturation rate. The 100 stocks demonstrating the champion operation of these factors suffice for inclusion successful the last portfolio.

The existent apical 5 holdings for SCHD:

Abbott Laboratories: 4.5%
UnitedHealth Group: 4.5%
Merck: 4.4%
Amgen: 4.2%
Procter & Gamble: 4.2%

When buying a dividend ETF, oregon immoderate ETF for that matter, you privation a enactment strategy that tries to place and put successful the champion of the best. That's what this ETF does. By considering dividend growth, yield, and fiscal health, each screens enactment arsenic cross-checks against each other.

High yields whitethorn get removed due to the fact that they're not demonstrating the equilibrium expanse prime to backmost it up. Dividend growers whitethorn get screened retired due to the fact that they've lone accrued the dividend minimally capable to support the streak growing. All qualifying stocks alternatively conscionable stringent criteria crossed the board.

The lawsuit for VIG

VIG tracks the S&P U.S. Dividend Growers Index, which targets companies that person accrued their yearly dividend for astatine slightest 10 consecutive years. The last portfolio gets weighted by marketplace cap.

The existent apical 5 holdings for VIG:

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