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David Dierking, The Motley Fool
Tue, June 2, 2026 astatine 9:50 AM CDT 4 min read
The iShares Core Dividend Growth ETF (NYSEMKT: DGRO) and the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) people dividend-paying stocks, but they spell astir it successful antithetic ways.
DGRO focuses much connected dividend growth. SCHD looks for precocious output with quality. In galore marketplace environments, some strategies thin to nutrient comparatively akin returns.
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But 2026 is simply a small different. This is an situation wherever the results are meaningfully different. SCHD is up astir 20% twelvemonth to date, but DGRO is up lone 8%. That means investors tin summation a wide vantage by being much circumstantial successful their enactment of dividend stocks.
How each money screens its portfolio
The Schwab U.S. Dividend Equity ETF tracks the Dow Jones U.S. Dividend 100 Index, which screens stocks based connected currency travel to full debt, instrumentality connected equity, dividend yield, and five-year dividend growth. The effect is simply a astir 100-stock portfolio that hits connected each large strategies: dividend growth, dividend quality, and precocious yield.
The iShares Core Dividend Growth ETF tracks the Morningstar U.S. Dividend Growth Index, which requires astatine slightest 5 consecutive years of yearly dividend increases and a payout ratio beneath 75%. It's a much simplistic enactment criterion and truthful creates a broader and much diversified portfolio.
Performance and cardinal metrics
| Expense ratio | 0.06% | 0.08% |
| Assets nether management | $94.9 billion | $40.3 billion |
| Dividend yield | 3.2% | 2% |
| Year-to-date return | 19.9% | 8.4% |
| 10-year annualized return | 12.9% | 13.3% |
| Number of holdings | 103 | 394 |
| Top sectors | Consumer staples (19%), healthcare (19%), vigor (17%) | Financials (21%), tech (20%), healthcare (17%) |
Data sources: Schwab, iShares.
The biggest differentiator successful presumption of axenic numbers is astir apt the yield. Dividend growers aren't needfully the highest yielders, which is evident successful the iShares ETF's 2% yield. The precocious output of the Schwab ETF has ever accrued the attractiveness of this fund.
There's a large quality successful the portfolios, though. Outside of the akin weights successful healthcare, the apical 3 assemblage holdings are wholly different, and there's lone 20% overlap successful the 2 funds. The iShares Core Dividend Growth ETF tilts decidedly little defensively, which could springiness it the vantage successful an upward-trending market.
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