Dependable Exchange-Traded Funds Offering Regular Income Streams
In the world of investing, dividend-focused Exchange-Traded Funds (ETFs) have gained popularity among investors seeking steady income. Two such ETFs, the Schwab U.S. Dividend Equity ETF (SCHD) and the iShares Core High Dividend ETF, have been making waves in the market. Let's take a closer look at these two funds.
The Schwab U.S. Dividend Equity ETF, as of Aug. 5, boasts 103 holdings, each selected for their low-cost, fundamentally strong, and quality dividend stocks. As of August 30, 2025, the top ten companies in the SCHD include Chevron Corp, ConocoPhillips, Altria Group, PepsiCo, AbbVie, The Home Depot, Merck & Co., Cisco Systems, Texas Instruments, and Verizon Communications. The ETF averages an overall yield of around 3.9%, making it a higher-yielding option compared to the S&P 500 average of 1.2%.
On the other hand, the iShares Core High Dividend ETF focuses on 75 of the best high-dividend stocks. This ETF is heavily allocated to sectors with long-term stability, such as healthcare, energy, and consumer staples, collectively representing 64% of all the stocks within the ETF. The top three stocks in the iShares Core High Dividend ETF are ExxonMobil (8.5%), Johnson & Johnson (6.7%), and AbbVie (5.8%), accounting for a combined 21%. The ETF has a yield of 3.5%, slightly smaller than the SCHD's yield.
When it comes to fees, the Schwab U.S. Dividend Equity ETF has a slight edge with an expense ratio of 0.06%, compared to the iShares Core High Dividend ETF's 0.08%. Both ETFs are suitable for long-term investing due to their low fees.
However, the iShares Core High Dividend ETF is more concentrated than the Schwab U.S. Dividend Equity ETF, with multiple stocks above the 4.3% threshold of the largest holding. In the past year, the iShares Core High Dividend ETF has rallied 6% in value and has a total return of nearly 8% when including its dividend. The Schwab U.S. Dividend Equity ETF, on the other hand, has a higher total return of over 6% in the same period.
In conclusion, both the Schwab U.S. Dividend Equity ETF and the iShares Core High Dividend ETF offer unique advantages. The SCHD, with its broader diversification and higher yield, might appeal to investors seeking a more balanced portfolio. The iShares Core High Dividend ETF, with its focus on stability and concentration in high-yielding stocks, could be a suitable choice for those prioritising safety and long-term growth. As with any investment, it's crucial to conduct thorough research and consider your own investment goals before making a decision.
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