SCHD
Schwab U.S. Dividend Equity ETF
SCHD tracks the Dow Jones U.S. Dividend 100 Index, focusing on high-quality US companies with 10+ years of dividend payments and rigorous financial health screens. Emphasizes sustainable dividend growth and capital appreciation.
DIVO
Amplify CWP Enhanced Dividend Income ETF
DIVO uses a multi-factor approach combining dividend growth stocks with selective covered call writing on 20-30% of the portfolio. Aims to enhance income while maintaining growth potential through active management.
Key Metrics Comparison
| Metric | SCHD | DIVO | Winner |
|---|---|---|---|
| Dividend Yield | 3.27% | 4.85% | DIVO (+1.39%) |
| Expense Ratio | 0.06% | 0.55% | SCHD (-0.49%) |
| 5-Year Annual Return | 11.2% | 9.8% | SCHD (+1.4%) |
| 3-Year Annual Return | 12.8% | 10.2% | SCHD (+2.6%) |
| Dividend Growth (5Y) | 8.5% | 6.2% | SCHD (+2.3%) |
| Beta (5-Year) | 0.85 | 0.70 | DIVO |
| Sharpe Ratio | 0.95 | 0.85 | SCHD |
| Maximum Drawdown | -12.5% | -10.2% | DIVO |
| Distribution Frequency | Quarterly | Monthly | DIVO |
| Tax Efficiency | High | Lower* | SCHD |
*DIVO's covered call premiums are taxed as ordinary income, while SCHD's dividends are mostly qualified
Performance Analysis
SCHD Performance
Superior long-term returns with quality-driven growth. Proven track record across market cycles with strong capital appreciation and consistent dividend growth.
DIVO Performance
Strong risk-adjusted returns with enhanced income. Selective covered call strategy provides higher yield with managed volatility, but lags in total returns.
Strategy Analysis
SCHD: Pure Quality Dividend Growth
Passive quality screening across all sectors:
- Minimum 10 years of dividend payments
- Cash flow to total debt > 50%
- Return on equity > 15%
- Dividend yield > 2.5% requirement
- Market cap > $500 million
- Focus on sustainable dividend growth
- Extremely low 0.06% expense ratio
DIVO: Enhanced Dividend Income
Active multi-factor approach with options:
- Active management by CWA Asset Management
- Combines dividend growth stocks
- Selective covered calls (20-30% of portfolio)
- Focus on high-quality, dividend-growing companies
- Monthly income distributions
- Lower volatility than pure equity
- Higher 0.55% expense ratio
The Enhanced Income Trade-off: Quality vs Complexity
DIVO sacrifices 1.4% annual returns for 1.39% higher current yield and lower volatility. DIVO's selective covered call approach (20-30% vs 100% for QYLD/XYLD) allows more upside participation. However, the 0.55% expense ratio is 9.2x higher than SCHD's 0.06%, significantly impacting compounding. DIVO's active management adds complexity and manager risk.
Income & Distribution Analysis
SCHD Income Profile
Moderate yield with strong, predictable growth. Tax-efficient qualified dividends that increase annually with corporate earnings growth.
DIVO Income Profile
Higher current yield with monthly distributions. Enhanced income from selective covered calls, but with tax-inefficient ordinary income treatment.
Note: DIVO's distributions include both qualified dividends from stocks and ordinary income from covered call premiums. The exact mix varies monthly. SCHD's distributions are consistently mostly qualified dividends.
Sector Allocation Comparison
SCHD Sectors (Diversified Quality)
DIVO Sectors (Concentrated Quality)
Key Difference: Both focus on quality sectors but with different concentrations. DIVO is more concentrated (25 holdings vs 104) with heavier tech exposure. SCHD provides broader diversification across more holdings and sectors. DIVO's active management allows sector rotation based on market conditions.
Top Holdings Comparison
SCHD Top Holdings
DIVO Top Holdings*
Note: DIVO holds only ~25 high-conviction stocks, resulting in higher individual position weights. SCHD's 104 holdings provide better diversification. DIVO's active management may change holdings based on market conditions, while SCHD's holdings follow its rules-based index.
Investment Recommendation
🏆 Choose SCHD If:
- Total return is your priority (11.2% vs 9.8%)
- You want pure, rules-based investing
- Dividend growth matters most (8.5% vs 6.2%)
- Lower expenses are critical (0.06% vs 0.55%)
- You want maximum tax efficiency
- You prefer passive, predictable strategies
- You want broader diversification (104 vs 25 holdings)
💰 Choose DIVO If:
- Enhanced income with growth is your goal
- You want monthly cash flow
- You're comfortable with active management
- You want some options income without full upside cap
- You're in a tax-advantaged account (IRA/401k)
- You want lower volatility than pure equity
- You believe in active manager skill
⚠️ Important Considerations
DIVO's 0.55% expense ratio is 9.2x higher than SCHD's 0.06% - this costs $490 more annually per $100k invested. Active management risk means performance depends on manager skill. Tax complexity with mixed qualified/ordinary income distributions. However, DIVO's selective covered call approach (20-30%) is much more conservative than QYLD/XYLD's 100% coverage, allowing more upside participation.
📊 Overall Winner: SCHD for Simplicity & Total Returns
SCHD wins for most investors due to simplicity, lower costs, and superior total returns. DIVO is a reasonable alternative for investors who specifically want enhanced monthly income and are willing to pay higher fees for active management. The 1.4% annual return advantage for SCHD compounds significantly over time, and the tax efficiency is a major advantage for taxable accounts. DIVO makes the most sense in tax-advantaged accounts where its mixed distributions don't create tax complexity.