SCHD vs SPDV

SCHDASchwab U.S. Dividend Equity ETF

SPDVBAAM S&P 500 High Dividend Value 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.

SPDV Most high-dividend screens end up a pile of utilities and financials. SPDV takes the five best dividend-plus-free-cash-flow names in every S&P 500 sector, equal-weights them, and pays out monthly.

Stated mandate

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

SPDV The Fund passively tracks the S&P 500 Dividend and Free Cash Flow Yield Index. Its rules-based, equal-weighted approach targets S&P 500 constituents with high dividend yields and sustainable dividend distributions while maintaining diversified sector exposure.

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.

• SPDV Yield alone can flag a payout about to be cut. This index ranks S&P 500 names on dividend yield times free-cash-flow yield, so the dividend has to be backed by cash the business actually generates.sec.gov
• Top five scorers per GICS sector, equal-weighted, reset each January and July. No single sector or mega-cap gets to run the portfolio.sec.gov
• 0.29% a year, below the median fee among dividend-screen funds, and distributions land monthly rather than quarterly.
• No manager discretion to drift: a rules-based portfolio of roughly 50 stocks that has hewed closely to its stated index.

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.

• SPDV A smaller, thinly traded fund. Limit orders matter more here than with the category's household names.
• The index giants in this corner (SCHD, SPYD, VIG) charge under a tenth of a percent, so SPDV's fee buys the sector-balanced cash-flow screen, not the cheapest beta.
• Sector balance cuts both ways: when one high-yield corner is hot, SPDV still holds only five names in it, and the semi-annual reset can churn holdings.sec.gov

Full SCHD profile⁠

Full SPDV profile⁠