DDIV vs SCHD

DDIVDFirst Trust Dorsey Wright Momentum & Dividend ETF

SCHDASchwab U.S. Dividend Equity ETF

In short

DDIV Most dividend funds stop at yield. DDIV adds a second screen: Dorsey Wright's relative-strength momentum ranking, leaving about 50 income payers that are also trending. A trend filter bolted onto an income screen, running since 2014.

SCHD The dividend fund that checks the balance sheet before it checks the yield. SCHD only considers companies with 10 straight years of payouts, then ranks the survivors on cash flow, return on equity and dividend growth. Quality gate first, income second, at six basis points.

Stated mandate

DDIV The Fund seeks to generally track the price and yield performance of the Dorsey Wright Momentum Plus Dividend Yield Index. It normally invests at least 90% of net assets in securities comprising that Index.

SCHD The fund seeks to track, before fees and expenses, the total return of the Dow Jones U.S. Dividend 100TM Index.

Why people hold it

• DDIV Two screens, not one. Dividend yield gets you in the door; Dorsey Wright relative-strength momentum decides who stays. Few income ETFs bother with a trend filter at all.ftportfolios.com
• Rules run it, not a manager's hunch. The fund normally keeps at least 90% of net assets in its index's stocks, so you get the stated strategy undiluted.ftportfolios.com
• A concentrated book of roughly 50 names and quarterly distributions, live since 2014 and through several full market cycles.

• SCHD Charges 0.06% a year, near the floor for US equity ETFs and a fraction of what the typical dividend-screen fund costs.schwabassetmanagement.com
• The rulebook is strict: 10 consecutive years of dividends to qualify, then a composite rank on cash-flow-to-total-debt, return on equity, yield and five-year dividend growth.spglobal.com
• Index rules cap any single stock at 4.5% and any sector at 25%, so one hot name cannot quietly become the whole income stream.spglobal.com
• Running since 2011 and now among the largest, most heavily traded dividend ETFs, with tracking that stays very close to its index.

Worth knowing

• DDIV The overlay is not free: 0.60% a year, above the roughly 0.39% median for dividend-screen ETFs and well above plain trackers like SCHD (0.06%) and VIG (0.04%).
• Thinly traded and modest in assets next to the household-name dividend funds. Limit orders matter more here than in a fund that trades by the million.
• Momentum crowds into whatever is working. With about 50 holdings, sector tilts can shift sharply from one rebalance to the next.

• SCHD Roughly 100 names, every one a long-time dividend payer. The fast-growing non-payers that drive much of the US market are not eligible, by design.spglobal.com
• The yield and quality screens tilt it toward mature, cash-generating sectors, so it looks nothing like a total-market fund. Distributions land quarterly, not monthly.spglobal.com
• Not the absolute cheapest shelf item: VIG runs 0.04% and DIVB 0.05%, though both screen for dividends differently.

Full DDIV profile⁠

Full SCHD profile⁠