SCHD Is Magnificent, but This Dividend ETF Could Be an Even Better Dividend Play
2026-07-27 12:15
•David Dierking •The Motley Fool
••• •• Axe Capital view
SCHD Is Solid, But RDVY Offers a Different Dividend Flavor
While SCHD delivers steady income, RDVY’s superior returns make it an intriguing choice if you can handle more volatility.
SCHD, the Schwab U.S. Dividend Equity ETF, is well-known for its dependable 3.3% dividend yield and rock-bottom 0.06% fees. It’s a go-to for income-focused investors who want low fuss and steady payouts. However, RDVY, the First Trust Rising Dividend Achievers ETF, has quietly outperformed SCHD over the past decade, returning almost 16% annually versus SCHD’s 12.5%. RDVY leans heavier on sectors like financials and tech, which makes it more sensitive to economic swings but also offers more growth potential. For South African investors thinking about offshore diversification, the USD/ZAR will heavily influence whether the extra volatility and lower 0.8% yield of RDVY is worthwhile. If the rand weakens, the stronger total return in dollar terms from RDVY might look very appealing. But if you prefer predictability and steady income in rand terms, SCHD remains a solid choice. This view could be wrong if global markets enter a highly volatile phase that punishes growthier dividend stocks. this is just my opinion and not financial advice
For investors comfortable with some extra movement and aiming for growth, consider starting a position in RDVY as a complement to SCHD. If income stability matters more and currency risk is a concern, stick with or gradually trim into SCHD.
- SCHD
- RDVY
- USD/ZAR
- US economic downturn affecting financials and tech sectors in RDVY
- Rand volatility impacting offshore dividend yield realizations
6/10
While the Schwab U.S. Dividend Equity ETF (SCHD) remains a popular dividend ETF with a 3.3% yield and low 0.06% expense ratio, the First Trust Rising Dividend Achievers ETF (RDVY) has significantly outperformed it over the past decade, delivering 15.96% annual returns versus SCHD's 12.5%. However, RDVY comes with higher volatility (20% greater) and a lower dividend yield of 0.8%, making it more growth-oriented and economically sensitive due to overweights in financials and technology.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: David Dierking
Categories: Rates, Equities, Capital Returns
Tickers: SCHD, RDVY
Sentiment: Positive - Described as 'magnificent' and 'still a great dividend ETF' with strong fundamentals including low expense ratio (0.06%), attractive dividend yield (3.3%), and solid 10-year returns (12.5% annually). Remains a reliable choice for dividend investors despite being outperformed by RDVY. Demonstrated substantially superior performance with 15.96% annual returns over 10 years, outperforming SCHD by 3 percentage points. Uses similar dividend-focused strategy with emphasis on dividend growth, yield, and balance sheet quality. Recommended for investors seeking more growth potential.
Keywords: dividend ETF, SCHD, RDVY, dividend yield, ETF performance, dividend growth, investment strategy
Insights:
- SCHD: Positive: Described as 'magnificent' and 'still a great dividend ETF' with strong fundamentals including low expense ratio (0.06%), attractive dividend yield (3.3%), and solid 10-year returns (12.5% annually). Remains a reliable choice for dividend investors despite being outperformed by RDVY.
- RDVY: Positive: Demonstrated substantially superior performance with 15.96% annual returns over 10 years, outperforming SCHD by 3 percentage points. Uses similar dividend-focused strategy with emphasis on dividend growth, yield, and balance sheet quality. Recommended for investors seeking more growth potential.