DON vs SCHD

DONBWisdomTree U.S. MidCap Dividend Fund

SCHDASchwab U.S. Dividend Equity ETF

In short

DON Most dividend funds read like a mega-cap roll call. DON deletes the 300 largest payers first, then weights what's left by the dollars of dividends each company is projected to pay. Mid-cap income, run the same way since 2006.

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

DON The Fund seeks to track the price and yield performance of dividend-paying mid-capitalization companies in the U.S. equity market. It uses passive indexing and generally invests in Index constituents or economically similar investments.

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

• DON The index removes the 300 largest U.S. dividend payers before building, so DON holds mid-cap names that mega-cap-heavy dividend funds mostly skip.wisdomtree.comsec.gov
• Weights come from projected cash dividends, not market cap, and any one sector is capped at 25% on the annual screening date.sec.gov
• Plain passive indexing: roughly 300 holdings, tracking that has stayed close to its index, and cash out the door monthly.
• Live since 2006 and now a multi-billion-dollar fund, so the strategy has a long paper trail rather than a launch-week backtest.

• 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

• DON The 0.38% fee matches the median for dividend-screen funds but runs well above large-cap staples like VIG (0.04%) and SCHD (0.06%).
• Mid-cap payers tend to move more than mega-cap stalwarts, and risk is the softest part of this fund's profile inside its dividend peer group.
• The fund is classified as non-diversified, and sector weights can drift above that 25% cap between annual screenings.sec.gov

• 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 DON profile⁠

Full SCHD profile⁠