Summary
- SCHD is showing signs of no longer then “fan favorite” in the dividend investing community
- What other dividend growth ETFs are worth looking into for investors
- Which of the competitors is my favorite
The downfall of SCHD ETF
As I type out “the downfall” of SCHD I am certainly exaggerating in saying that the dividend growth king known as the Schwab US dividend equity ETF is having trouble of these magnitudes, but the dividend community on the other hand seems like they are at least torn on what they think of the dividend ETF, and some are angrier than others.
Long-term dividend investors like me, that buy investments for decade long timeframes see SCHD ETF still being down in price as a short-term buying opportunity and or just a low beta sleep well at night ETF that for whatever reason is still lagging the market. But other holders of the dividend equity ETF are fed up with the lack of performance while the rest of the stock market is magically back to all time highs.
SCHD is reconstituted once per year, and depending on which names make it into the dow jones dividend 100 index holdings (the index SCHD tracks) is going to have everything to do with how SCHD’s performance is going to look for the next 12 months.
SCHD holds a bunch of solid, established companies that had to pass several strict screens to get into the Dow Jones U.S. Dividend 100 Index which are things like consistent dividend history, strong balance sheets, and good fundamentals. But the reality is, a lot of these stocks just haven’t been performing well lately. They’re reliable, yes… But many have lagged the broader market. That’s the tradeoff with SCHD: you’re getting quality and steady income, but not necessarily the best growth right now. Which like I mentioned earlier seems to be understandable for some long-term investors, but other have had enough!
5 Top Dividend Growth ETFs (not named SCHD)
Here are 5 dividend growth ETFs well worth looking into for those dividend investors seeking things like: dividends, dividend growth, cheap expense ratios, and of course growth potential
#1 FDVV Fidelity High Dividend ETF ~ 3.23% dividend yield ~ 7.5% dividend growth rate
#2 DGRO iShares Core Dividend Growth ETF ~ 2.26% dividend yield ~ 9% dividend growth rate
#3 DGRW WisdomTree U.S. Quality Dividend Growth Fund ETF ~ 1.51% dividend yield ~ 8% dividend growth rate
#4 VIG Vanguard Dividend Appreciation Index Fund ETF Shares ~ 1.76$ dividend yield ~ 7.5% dividend growth rate
#5 VYM Vanguard High Dividend Yield Index Fund ETF Shares ~ 2.7% dividend yield ~ 5.56% dividend growth rate
My Favorite Dividend Growth ETF (Not SCHD)
My top pick behind my current favorite SCHD ETF would have to be VIG Vanguard Dividend Appreciation ETF. This ETF offers a diversified portfolio, is very low cost to own and have tons of dividend growth along with capital appreciation all the way since inception. All the list dividend growth ETFs are worth looking into and might solve exactly the need you are looking for inside your portfolio. Even though some investors are fed up with SCHD ETF I still think that SCHD is a great ETF worth looking into and will make up a large portion of my portfolio for many years to come