SCHD vs UDIV

SCHDASchwab U.S. Dividend Equity ETF

UDIVBFranklin U.S. Core Dividend Tilt Index 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.

UDIV Most dividend funds throw out the market and keep the payers. UDIV keeps the market and leans it: an optimizer nudges a broad US index toward higher yield while staying tethered to it. Income tilt, index shape.

Stated mandate

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

UDIV The Fund seeks investment results that closely correspond, before fees and expenses, to the performance of the Morningstar US Dividend Enhanced Select 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.

• UDIV Six basis points, in a category where the typical fund charges 0.39%. That matches SCHD and undercuts DGRO, the shelf's best-known names.franklintempleton.com
• Roughly 140 stocks selected by an optimizer built to maximize yield per unit of active risk against the broad market, not by simply ranking companies on payout.franklintempleton.com
• Plain index plumbing: it follows the Morningstar US Dividend Enhanced Select Index with one of the tightest label-to-portfolio matches in its peer group. No side bets bolted on.
• Running since 2016 and paying quarterly, which puts it among the stronger implementations in the US dividend-screen crowd.

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.

• UDIV Thinly traded and modest in size, so bid-ask spreads can run wider than at the household-name dividend ETFs.
• A tilt, not a yield hunt. The index limits how far it drifts from the broad market, which also limits how much extra income the tilt can add.franklintempleton.com
• Fully invested in US stocks with no downside cushion. The dividend tilt shapes the payout, not the drawdown.

Full SCHD profile⁠

Full UDIV profile⁠