SCHD vs VYM vs VIG: The Ultimate Dividend ETF Comparison 2026

The Dividend ETF Showdown

Dividend investing is having a moment. After years of growth stocks dominating, investors are rediscovering the appeal of companies that pay you to own them.

Three dividend ETFs dominate the conversation: SCHD (Schwab U.S. Dividend Equity), VYM (Vanguard High Dividend Yield), and VIG (Vanguard Dividend Appreciation). They all focus on dividends, but their approaches are very different.

Let's break down each one and figure out which fits your goals.

Quick Comparison

Feature	SCHD	VYM	VIG
Strategy	Quality + Dividend	High Current Yield	Dividend Growth
Index	Dow Jones Dividend 100	FTSE High Dividend Yield	S&P Dividend Growers
Holdings	~100	~550	~340
Expense Ratio	0.06%	0.06%	0.06%
Current Yield	~3.5%	~3.2%	~1.8%
AUM	~$60 Billion	~$55 Billion	~$85 Billion
Focus	Quality fundamentals	Highest yielders	10+ yr dividend growth

SCHD: Quality Dividend Growth

SCHD has become the internet's favorite dividend ETF. It focuses on companies with strong fundamentals AND solid dividends - the best of both worlds.

How SCHD Selects Stocks

SCHD uses a multi-factor approach:

Dividend history: Must have paid dividends for 10+ consecutive years
Cash flow to total debt: Financial strength measure
Return on equity: Profitability measure
Dividend yield: Current income
5-year dividend growth rate: Growing payouts

The result is a portfolio of financially strong companies that pay attractive dividends AND grow them over time.

SCHD Top 10 Holdings

Rank	Company	Weight	Sector	Yield
1	AbbVie	4.5%	Healthcare	3.6%
2	Coca-Cola	4.4%	Consumer Staples	2.9%
3	Cisco Systems	4.3%	Technology	2.8%
4	Broadcom	4.2%	Technology	1.5%
5	Home Depot	4.1%	Consumer Disc.	2.4%
6	Verizon	4.0%	Communication	6.4%
7	Chevron	3.9%	Energy	4.2%
8	PepsiCo	3.8%	Consumer Staples	2.7%
9	Merck	3.7%	Healthcare	2.5%
10	Texas Instruments	3.6%	Technology	2.9%

SCHD Key Characteristics

Concentrated: Only ~100 holdings (vs 500+ for others)
Quality focus: Strong balance sheets and profitability
Balanced yield: 3.5% yield - high but not extreme
Good growth: Holdings tend to grow dividends consistently
Tax efficient: Mostly qualified dividends

VYM: High Dividend Yield

VYM takes a simpler approach: own the highest-yielding large-cap stocks. If you want maximum current income, VYM delivers.

How VYM Selects Stocks

VYM's methodology is straightforward:

Start with large-cap U.S. stocks
Rank them by dividend yield
Select the top 50% by yield
Weight by market cap

There's no quality screen. If a company has a high yield, it's in - regardless of why the yield is high (sometimes yields are high because the stock price crashed).

VYM Top 10 Holdings

Rank	Company	Weight	Sector	Yield
1	JPMorgan Chase	3.9%	Financials	2.3%
2	Broadcom	3.4%	Technology	1.5%
3	ExxonMobil	3.2%	Energy	3.4%
4	Johnson & Johnson	2.9%	Healthcare	3.0%
5	Procter & Gamble	2.5%	Consumer Staples	2.3%
6	Home Depot	2.3%	Consumer Disc.	2.4%
7	AbbVie	2.2%	Healthcare	3.6%
8	Merck	2.1%	Healthcare	2.5%
9	Chevron	2.0%	Energy	4.2%
10	Bank of America	1.9%	Financials	2.5%

VYM Key Characteristics

Diversified: ~550 holdings across all sectors
Simple approach: Just screens for yield, no quality filters
Higher financial exposure: Banks and insurers are often high yielders
Value tilt: High yield stocks tend to be value stocks
Some yield traps: May include stocks with unsustainably high yields

VIG: Dividend Appreciation

VIG takes a completely different approach: it doesn't care about current yield. Instead, it focuses on companies with long track records of GROWING their dividends.

How VIG Selects Stocks

VIG's methodology prioritizes dividend growth history:

Must have raised dividends for 10+ consecutive years
Excludes the top 25% highest yielders (they might cut)
Excludes REITs
Weights by market cap

The philosophy: a company that has raised its dividend every year for a decade is likely to continue doing so. Low current yield is fine if it grows every year.

VIG Top 10 Holdings

Rank	Company	Weight	Sector	Yield
1	Microsoft	5.2%	Technology	0.8%
2	Apple	4.8%	Technology	0.5%
3	Broadcom	3.9%	Technology	1.5%
4	JPMorgan Chase	3.5%	Financials	2.3%
5	UnitedHealth	3.2%	Healthcare	1.4%
6	Visa	2.8%	Financials	0.8%
7	Mastercard	2.5%	Financials	0.6%
8	Home Depot	2.3%	Consumer Disc.	2.4%
9	Johnson & Johnson	2.2%	Healthcare	3.0%
10	Procter & Gamble	2.1%	Consumer Staples	2.3%

VIG Key Characteristics

Growth-oriented: Includes Apple, Microsoft, Visa - growth stocks with growing dividends
Low current yield: Only ~1.8% - lowest of the three
High quality bias: Companies that grow dividends tend to be well-managed
More growth potential: Holdings have better earnings growth prospects
Less value exposure: Avoids the "yield trap" stocks

Head-to-Head Comparison

Complete Metrics Comparison

Metric	SCHD	VYM	VIG
Expense Ratio	0.06%	0.06%	0.06%
Current Yield	3.5%	3.2%	1.8%
5-Year Dividend Growth	12.5%	6.8%	10.2%
Holdings Count	~100	~550	~340
P/E Ratio	16x	15x	22x
Beta	0.85	0.88	0.92
Dividend Frequency	Quarterly	Quarterly	Quarterly

Income Generation ($100,000 Portfolio)

Fund	Current Annual Income	Income in 10 Years*
SCHD	$3,500	$11,600
VYM	$3,200	$6,100
VIG	$1,800	$5,200

*Projected based on historical dividend growth rates. Not guaranteed.

SCHD wins on both current yield AND dividend growth, which is why it's become so popular.

Sector Exposure Analysis

Each fund has very different sector exposures:

Sector Weights Comparison

Sector	SCHD	VYM	VIG	S&P 500
Technology	12%	10%	24%	31%
Financials	18%	22%	18%	13%
Healthcare	16%	14%	15%	12%
Consumer Staples	14%	12%	10%	6%
Industrials	15%	10%	14%	9%
Energy	8%	9%	2%	4%
Consumer Disc.	6%	6%	8%	10%
Communication	5%	6%	3%	9%
Utilities	3%	6%	3%	2%
Materials	2%	3%	2%	2%
Real Estate	1%	2%	1%	2%

Key Sector Observations

VIG has the most tech: Includes Apple, Microsoft, Visa - closest to S&P 500
VYM is heavy on financials: Banks and insurers are yield-focused
SCHD is balanced: Good mix across defensive and cyclical sectors
All are underweight tech: Compared to S&P 500's 31% tech weight
All are overweight healthcare/staples: Traditional dividend sectors

Historical Performance

Annualized Returns

Period	SCHD	VYM	VIG	S&P 500 (VOO)
1 Year	12.5%	14.8%	18.2%	25.3%
3 Years	8.2%	7.5%	9.8%	10.1%
5 Years	12.8%	10.5%	12.2%	14.5%
10 Years	11.5%	9.8%	11.2%	12.6%

Risk-Adjusted Performance

Metric (10yr)	SCHD	VYM	VIG
Standard Deviation	16.2%	16.8%	15.5%
Max Drawdown	-25%	-28%	-24%
Sharpe Ratio	0.71	0.58	0.72
Upside Capture	85%	80%	90%
Downside Capture	75%	82%	78%

SCHD and VIG have delivered better risk-adjusted returns than VYM. They capture more upside while limiting downside better.

Performance in Different Markets

Market Environment	Best Performer	Worst Performer
Tech Rally (2023)	VIG	VYM
Rising Rates (2022)	SCHD	VIG
Value Rotation (2021)	SCHD	VIG
COVID Crash (2020)	VIG	VYM
Low Rates (2019)	VIG	VYM

Which Strategy Fits You?

Choose SCHD If:

You want balance: Good current yield AND dividend growth
Quality matters: You prefer companies with strong fundamentals
Building wealth: You're accumulating and reinvesting dividends
Moderate income need: 3.5% yield is enough for your goals
Value-conscious: You like the lower P/E ratio
Internet recommendation: Reddit and Twitter love SCHD (for good reason)

Choose VYM If:

Maximum diversification: 550+ holdings vs SCHD's 100
Simplicity: Straightforward high-yield approach
Financial sector exposure: You want more banks and insurers
Already retired: Need reliable income now, less concerned about growth
Deep value tilt: Comfortable owning beaten-down high yielders

Choose VIG If:

Growth + dividends: Want exposure to Apple, Microsoft, Visa
Long time horizon: 15+ years until you need income
Total return focus: Current yield matters less than growth
Less income tax: Lower yield = less taxable income
Quality focus: Companies with 10+ years of dividend growth
Closer to market: VIG acts more like the S&P 500

Decision Matrix

Your Situation	Best Choice	Why
Young, accumulating	VIG or SCHD	Growth potential, reinvest dividends
Mid-career, building	SCHD	Balance of yield and growth
Near retirement	SCHD or VYM	Higher current income
In retirement	VYM	Maximum current yield
Tax-sensitive	VIG	Lowest taxable yield
Want tech exposure	VIG	Includes Apple, Microsoft

The Bottom Line

All three are excellent dividend ETFs with rock-bottom 0.06% expense ratios. The differences come down to philosophy:

Summary Comparison

Fund	Philosophy	Best For
SCHD	Quality companies that pay AND grow dividends	Most dividend investors
VYM	Highest yielding large caps	Maximum current income
VIG	Companies with long dividend growth streaks	Growth-oriented dividend investors

My Take

SCHD is the best all-around choice for most people. It offers:

Attractive current yield (~3.5%)
Strong dividend growth (12.5% 5-year average)
Quality companies with solid fundamentals
Good risk-adjusted returns
Reasonable valuation (16x P/E)

VIG is excellent if you're young and prioritizing total return over current income. Its tech exposure means better growth potential.

VYM makes sense if you're already retired and need maximum income now, even if growth is slower.

The Combination Approach

Some investors combine these funds:

50% SCHD + 50% VIG: Balance of yield and growth
70% SCHD + 30% VYM: Higher yield, more diversification
Equal weight all three: Maximum diversification across strategies

Any of these approaches is reasonable. The most important thing is picking a strategy and sticking with it.

This is not investment advice. Dividend payments are not guaranteed. Past dividend history does not guarantee future dividends. Consider your personal situation before investing.