FTDS vs SCHD

FTDSCFirst Trust Dividend Strength ETF

SCHDASchwab U.S. Dividend Equity ETF

In short

FTDS A yield fund with a bouncer at the door: companies must clear debt, return-on-equity, payout and dividend-growth tests before the index ranks them by yield. The roughly 50 survivors get equal weight, rechecked every quarter.

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

FTDS The Fund seeks to track the price and yield performance of The Dividend Strength Index before fees and expenses.

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

• FTDS Balance sheet first: long-term debt under 40% of market cap, ROE above 10%, payout under 50%, five-year dividend growth above 5%. Yield ranking comes after those gates.nasdaqomx.comftportfolios.com
• Equal weight across roughly 50 names, rebuilt quarterly, so no single mega-cap sets the tone.ftportfolios.com
• Rules-based and passive: a Nasdaq-maintained index drawn from the Nasdaq US Benchmark, with liquidity screens. No manager picking favorites. Pays quarterly.nasdaqomx.com

• 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

• FTDS 0.70% net of a waiver through April 30, 2027 (0.81% gross), above the category median. Big index rivals cost far less: SCHD 0.06%, VIG 0.04%.
• A small fund that trades thinly, so the bid/ask spread is part of the cost of getting in and out.
• The ticker dates to 2006, the strategy does not: it tracked Value Line, then AlphaDEX indexes, before switching to The Dividend Strength Index in April 2022.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 FTDS profile⁠

Full SCHD profile⁠