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Historical average ~10.5%
Historical average ~11.4%
Current yield ~3.9%
Current yield ~2.2%
SCHD historical ~8.7%
DGRO historical ~9.2%
Comparison Results
Investment Growth
Final Value (SCHD)
$32,465
Final Value (DGRO)
$35,241
Total Return (SCHD)
+224.65%
Total Return (DGRO)
+252.41%
Dividend Income
Total Dividends (SCHD)
$7,892
Total Dividends (DGRO)
$5,112
Final Year Dividend (SCHD)
$1,265
Final Year Dividend (DGRO)
$775
Key ETF Metrics Comparison
| Feature | SCHD | DGRO | Difference |
|---|---|---|---|
| Current Dividend Yield | 3.9% | 2.2% | +1.7% (SCHD) |
| Expense Ratio | 0.06% | 0.08% | -0.02% (SCHD) |
| 10-Year Annualized Return | 10.65% | 11.38% | +0.73% (DGRO) |
| Number of Holdings | 104 | 445 | +341 (DGRO) |
| Inception Date | October 2011 | June 2014 | SCHD is older |
| Fund Size | ~$60 billion | ~$30 billion | +$30B (SCHD) |
| Dividend Payment Schedule | Quarterly | Quarterly | Same |
| 5-Year Dividend Growth | 10.6% | 9.2% | +1.4% (SCHD) |
Sector Allocation
SCHD Sector Allocation
DGRO Sector Allocation
Top 10 Holdings Comparison
SCHD Top Holdings
- • Broadcom Inc (AVGO) - 4.3%
- • AbbVie Inc (ABBV) - 4.2%
- • Cisco Systems (CSCO) - 4.1%
- • Merck & Co (MRK) - 4.0%
- • Home Depot (HD) - 4.0%
- • Amgen Inc (AMGN) - 3.9%
- • Coca-Cola Co (KO) - 3.7%
- • PepsiCo Inc (PEP) - 3.7%
- • Texas Instruments (TXN) - 3.6%
- • Verizon Communications (VZ) - 3.4%
DGRO Top Holdings
- • Apple Inc (AAPL) - 3.2%
- • Microsoft Corp (MSFT) - 3.1%
- • Exxon Mobil Corp (XOM) - 2.7%
- • Johnson & Johnson (JNJ) - 2.3%
- • JPMorgan Chase & Co (JPM) - 2.0%
- • Broadcom Inc (AVGO) - 1.9%
- • Procter & Gamble (PG) - 1.7%
- • Visa Inc (V) - 1.5%
- • Home Depot Inc (HD) - 1.5%
- • Chevron Corp (CVX) - 1.4%
Understanding SCHD vs DGRO
Investment Strategy Differences
The primary difference between these two popular ETFs lies in their dividend strategy:
SCHD Strategy Focus
SCHD focuses on high-quality companies with both high current dividends and a history of dividend growth. It tracks the Dow Jones U.S. Dividend 100 Index, which selects companies based on dividend yield, dividend growth, and financial strength metrics.
DGRO Strategy Focus
DGRO emphasizes companies with a consistent history of dividend growth rather than high current yield. It tracks the Morningstar US Dividend Growth Index and requires companies to have at least 5 years of uninterrupted dividend growth.
This fundamental difference in strategy leads to SCHD having a higher current dividend yield, while DGRO potentially offers slightly better total return through capital appreciation.
Portfolio Concentration and Diversification
Another key difference between these ETFs is the level of diversification and concentration:
- SCHD holds around 100 stocks, with its top 10 holdings accounting for approximately 40% of the portfolio. This relatively concentrated approach focuses on the highest-quality dividend payers.
- DGRO is significantly more diversified with over 400 holdings, and its top 10 holdings make up only about 20% of the portfolio.
This means SCHD may experience more volatility from individual stock movements, while DGRO provides broader market exposure with less company-specific risk.
Historical Performance Context
Understanding the historical context of both ETFs can provide valuable insights:
- Growth vs. Value Cycles: SCHD tends to perform better during value-oriented market cycles, while DGRO may outperform during growth-oriented markets due to its higher technology exposure.
- Interest Rate Environments: SCHD has historically been more sensitive to interest rate changes due to its higher concentration in financial and utility sectors.
- Dividend Growth Trajectory: While SCHD currently offers higher yield, DGRO's dividend growth rate has been competitive, potentially offering better long-term income growth for those with longer time horizons.
It's worth noting that past performance doesn't guarantee future results, and the economic environment can significantly impact which strategy outperforms in any given period.
When to Choose Each ETF
Consider SCHD if you:
- Prioritize current dividend income
- Prefer quality over quantity in holdings
- Want exposure to established, large companies
- Are seeking lower fees (0.06% vs 0.08%)
- Value higher dividend growth rates
- Are in or near retirement and need income now
Consider DGRO if you:
- Prioritize total return over current income
- Prefer broader diversification
- Want exposure to growth-oriented dividend payers
- Prefer more technology sector exposure
- Value consistent dividend growth history
- Have a longer time horizon before needing income
Portfolio Implementation Strategies
Combining SCHD and DGRO
Many investors find value in holding both ETFs to create a more balanced dividend portfolio:
Complementary Approach
SCHD and DGRO have different selection criteria that result in relatively low overlap in their top holdings. By combining them, you gain exposure to both high-quality current dividend payers (SCHD) and companies focused on consistent dividend growth (DGRO), creating a more diversified dividend portfolio.
Sample Allocation Strategies:
| Strategy | SCHD Allocation | DGRO Allocation | Best For |
|---|---|---|---|
| Income Focus | 70% | 30% | Near-term income needs |
| Balanced | 50% | 50% | Balance of income and growth |
| Growth Focus | 30% | 70% | Long-term growth with some income |
Tax Considerations for Different Account Types
Taxable Accounts
Both ETFs distribute qualified dividends taxed at preferential rates. SCHD's higher yield means more current tax liability, while DGRO's lower yield but higher potential capital appreciation may offer more tax deferral.
Traditional IRAs/401(k)s
In tax-deferred accounts, the dividend tax advantage is neutralized as all withdrawals are taxed as ordinary income. Total return becomes the primary consideration here.
Roth IRAs
In tax-free accounts, high-dividend ETFs like SCHD can be especially advantageous as all dividend income and capital appreciation can be withdrawn tax-free in retirement.
Note: This information is for educational purposes only. Consult with a tax professional for advice specific to your situation.
Frequently Asked Questions
Can I own both SCHD and DGRO in my portfolio?
Yes, many investors choose to own both ETFs to benefit from their complementary approaches. SCHD provides higher current income, while DGRO offers more growth potential and broader diversification. There is some overlap in holdings, but their different selection criteria and weighting methodologies create distinct portfolios that can work well together.
Which ETF has performed better historically?
Over the past decade (as of 2025), DGRO has slightly outperformed SCHD in terms of total return, with an annualized return of approximately 11.4% compared to SCHD's 10.7%. However, SCHD has consistently provided higher dividend income and has performed better during certain market cycles, particularly when value stocks outperform growth stocks.
How do these ETFs perform during market downturns?
Both ETFs tend to be less volatile than the broader market during downturns due to their focus on financially stable companies. SCHD has historically shown slightly better downside protection during major market corrections due to its emphasis on quality and higher dividend yield, which can provide a cushion during volatile periods.
What are the tax implications of SCHD vs DGRO?
Both ETFs primarily distribute qualified dividends, which are taxed at lower rates than ordinary income for most investors. SCHD's higher dividend yield means you'll receive more taxable income annually, while DGRO's greater emphasis on capital appreciation may result in more deferred taxation. In tax-advantaged accounts like IRAs or 401(k)s, these differences are less significant.
How often do these ETFs rebalance their portfolios?
SCHD rebalances quarterly, while DGRO rebalances annually with quarterly reviews. This means SCHD may adapt more quickly to changing market conditions, while DGRO tends to have lower turnover and potentially greater tax efficiency.
Which ETF is better for retirement accounts?
Both ETFs can work well in retirement accounts. For Roth IRAs where tax-free dividend growth is valuable, SCHD's higher yield may be particularly advantageous. For traditional IRAs or 401(k)s, total return potential is often the primary consideration, so the choice depends more on your time horizon and income needs in retirement.
How do sector allocations differ between these ETFs?
SCHD has higher concentrations in financials, consumer staples, and industrials sectors. DGRO has relatively higher allocations to technology, healthcare, and consumer discretionary sectors. These sector differences contribute to their performance variations across different market environments.
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