Is SCHD the perfect high dividend yield ETF or is Vanguard High Dividend ETF a better choice?
Schwab SCHD US Dividend Equity ETF vs Vanguard Dividend Appreciation VIG, Vanguard Utilities ETF VPU and Vanguard High Dividend Yield ETF, VYM. Which one of these high dividend yield ETFs will rein supreme? Should SCHD become part of your passive income portfolio or is this doomed to underperform?
I compare all four ETFs against each other, look at the expense ratios, asset allocation, how the stocks are selected and compare the performance against the S&P 500 index. SCHD beats the S&P 500 most recently and has done remarkably well.
The top ten holdings of SCHD as of the time or the video 1/25/2013 is Broadcom, Verizon, Home Depot, Texas Instruments, Merck, BlackRock, IBM, Pepsi and Coca-Cola. All of these stocks pay a high dividend. Most of the companies included in SCHD are blue chip dividend stocks great for safe, low-risk passive income investing.
Some of the Vanguard ETFs such as the Dividend Appreciation fund are focused on high dividend growth and not just a high dividend yield. Will this strategy pay off in the long-term?
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What is great about the SCHD is that it holds just 104 stocks and they are fairly evenly distributed with percentages of around 4.1% or less for each stock in the portfolio as compared to VPU which has only 65 stocks but has 14.1% in one stock or VYM which has over 400 stocks in the portfolio.
A 5-year bar chart race was done between each of the high yield ETFs and the total dividends paid over the period was posted at the end.
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