SCHD vs SDVY

SCHDASchwab U.S. Dividend Equity ETF

SDVYCFirst Trust SMID Cap Rising Dividend Achievers ETF

In short

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.

SDVY Most dividend-growth funds fish in blue-chip waters. SDVY takes the same idea down the size scale: a Nasdaq index of small and mid cap US companies with a record of raising their payouts, run by First Trust since 2017.

Stated mandate

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

SDVY The Fund seeks to provide returns generally corresponding to the price and yield performance of the Nasdaq US Small Mid Cap Rising Dividend Achievers Index before fees and expenses. It normally invests at least 90% of net assets in securities included in that Index.

Why people hold it

• 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.

• SDVY Rising-dividend screening applied where it is uncommon. The heavyweights of this category (SCHD, VIG, DGRO) sit in large caps; SDVY runs the screen across US small and mid caps instead.
• Rules, not hunches. At least 90% of net assets stay in the Nasdaq US Small Mid Cap Rising Dividend Achievers Index, which selects on dividend growth alongside growth and quality traits.
• Spread thin on purpose: roughly 190 holdings, a multi-billion-dollar asset base, and heavy day-to-day trading volume for a small/mid cap strategy. Distributions come quarterly.

Worth knowing

• 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.

• SDVY Cost is the trade-off: 0.58% a year, above the dividend-screen median, and many times what the large-cap incumbents charge (SCHD 0.06%, VIG 0.04%).
• Smaller companies move harder in both directions, and this fund's ride has been rougher than that of large-cap dividend peers.
• It screens for dividends that are rising, not dividends that are large, so current income here generally runs below what high-yield-focused funds pay.

Full SCHD profile⁠

Full SDVY profile⁠