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.
FDVV
Fidelity High Dividend ETF
FDVV tracks the Fidelity High Dividend Index, selecting large and mid-cap US companies with high dividend yields and strong value characteristics. Uses a multi-factor approach combining yield, value, and quality metrics.
Key Metrics Comparison
| Metric | SCHD | FDVV | Winner |
|---|---|---|---|
| Dividend Yield | 3.27% | 3.92% | FDVV (+0.46%) |
| Expense Ratio | 0.06% | 0.29% | SCHD (-0.23%) |
| 5-Year Annual Return | 11.2% | 9.8% | SCHD (+1.4%) |
| Dividend Growth (5Y) | 8.5% | 6.3% | SCHD (+2.2%) |
| Number of Holdings | 104 | 162 | FDVV |
| Assets Under Management | $95.2B | $3.8B | SCHD |
| P/E Ratio | 15.2 | 14.5 | FDVV |
| Beta (5-Year) | 0.85 | 0.89 | SCHD |
| Sharpe Ratio | 0.95 | 0.82 | SCHD |
| Maximum Drawdown | -12.5% | -14.2% | SCHD |
Performance Comparison
SCHD Performance
Superior total returns with better risk-adjusted performance. Strong dividend growth and lower volatility. Consistently outperforms in various market conditions.
FDVV Performance
Higher current yield but lower total returns. More volatile with slightly larger drawdowns. Better for income-focused investors who value yield over total return.
Strategy Analysis
SCHD: Quality Dividend Growth
Rigorous quality screening with growth focus:
- 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
- Lower turnover, buy-and-hold approach
FDVV: Multi-Factor High Yield
Value-focused high yield with quality tilt:
- High dividend yield primary factor
- Value metrics (P/E, P/B, P/CF)
- Quality screens for financial stability
- Large and mid-cap US companies
- Higher turnover (quarterly rebalancing)
- Multi-factor optimization
- Broader diversification (162 holdings)
Quality Growth vs Value Yield Trade-off
SCHD sacrifices 0.46% in current yield for 1.4% higher annual returns and 2.2% better dividend growth. While FDVV's multi-factor approach combines yield with value metrics, SCHD's pure quality focus delivers superior long-term results. The 0.23% lower expense ratio for SCHD compounds over time, contributing to its performance advantage.
Dividend Analysis
SCHD Dividend Profile
Moderate yield with exceptional growth trajectory. Quality screens ensure dividend sustainability and strong growth potential.
FDVV Dividend Profile
Higher current yield with moderate growth. Multi-factor approach balances yield with value but results in slower dividend growth.
Sector Allocation
SCHD Sectors
FDVV Sectors
Key Similarities: Both ETFs have similar sector exposures with balanced allocations. FDVV has slightly higher Financials exposure (22.3% vs 15.2%), while SCHD has more balanced sector weights. Both include technology exposure, unlike many pure high-yield funds.
Top 5 Holdings Comparison
SCHD Top Holdings
FDVV Top Holdings
Note: Both ETFs hold Broadcom, showing overlap in quality dividend payers. SCHD has higher concentration in top holdings (average 4.4% vs FDVV's 3.0%), while FDVV offers more diversification with 162 holdings. Both include quality technology and healthcare companies.
Investment Recommendation
🏆 Choose SCHD If:
- Total return is your priority (11.2% vs 9.8%)
- Dividend growth matters (8.5% vs 6.3%)
- Lower expenses are important (0.06% vs 0.29%)
- You want proven long-term performance
- Quality screening is valuable to you
- Better risk-adjusted returns (Sharpe 0.95 vs 0.82)
- You prefer established, liquid ETFs
💰 Choose FDVV If:
- Higher current yield is your main goal (3.92% vs 3.27%)
- You prefer Fidelity's ecosystem
- More diversification appeals (162 holdings)
- You like the multi-factor approach
- You're comfortable with higher expenses for active-like strategy
- You want large/mid-cap value exposure
- Quarterly rebalancing aligns with your strategy
⚠️ Important Cost Consideration
FDVV's 0.29% expense ratio is 4.8x higher than SCHD's 0.06%. This 0.23% annual cost difference significantly impacts long-term returns. Over 20 years, this expense gap could reduce returns by approximately 5% assuming 8% annual returns. FDVV must generate superior gross returns to overcome this cost disadvantage.
📊 Overall Winner: SCHD
SCHD emerges as the clear winner for most investors. The 1.4% annual return advantage, superior dividend growth, lower expenses, and better risk-adjusted performance make SCHD the better choice. While FDVV offers slightly higher yield and more diversification, its higher costs and lower total returns are significant drawbacks. For long-term wealth building and dividend growth, SCHD's quality-focused approach consistently delivers superior results.