SCHD vs VYM vs VIG: which dividend ETF is best for you?
SCHD, VYM, and VIG are three of the most popular dividend ETFs in the US market. They all focus on dividends, but they take very different approaches. Choosing between them depends on whether you prioritise current income, dividend growth, or a balance of both.
Disclaimer: This article is for informational purposes only and does not constitute financial or tax advice. Consult a qualified financial adviser before making investment decisions. Yields, returns, and expense ratios cited below are approximate and change over time. Verify current figures before investing.
Quick comparison
| SCHD | VYM | VIG | |
|---|---|---|---|
| Full name | Schwab US Dividend Equity ETF | Vanguard High Dividend Yield ETF | Vanguard Dividend Appreciation ETF |
| Strategy | Quality + dividend yield | High current yield | Dividend growth (10+ yr streaks) |
| Yield | Around 3.5% | Around 2.5% | Around 1.6% |
| Expense ratio | Around 0.06% | Around 0.04% | Around 0.05% |
| Holdings | ~100 | ~440 | ~340 |
| Index | Dow Jones US Dividend 100 | FTSE High Dividend Yield | S&P US Dividend Growers |
SCHD: the balanced pick
SCHD tracks the Dow Jones US Dividend 100 Index, which screens for companies with at least 10 consecutive years of dividend payments, then ranks them by financial strength, dividend yield, and other quality metrics. The result is a concentrated portfolio of around 100 high-quality dividend payers.
SCHD tends to be heavy in financials, healthcare, and consumer staples. Its yield of around 3.5% sits in the middle ground between VYM's higher income and VIG's growth orientation.
Best for: Investors who want a balance of current income and quality. SCHD's screening process filters out companies with weak fundamentals, which can help avoid dividend traps (stocks with high yields that end up cutting their dividends).
VYM: highest current income
VYM tracks the FTSE High Dividend Yield Index, which simply selects US stocks forecasted to have above-average dividend yields. This gives it a broad portfolio of around 440 holdings with a straightforward focus: pay income now.
With a yield of around 2.5%, VYM tilts toward financials, healthcare, and energy. It is less selective about quality than SCHD, casting a wider net to capture high-yielding stocks across the market.
Best for: Investors who prioritise current income over growth. VYM is a solid pick if you are drawing on dividends for living expenses and want broad diversification across dividend-paying stocks.
VIG: dividend growth over current yield
VIG takes a completely different approach. It tracks the S&P US Dividend Growers Index, which requires companies to have increased their dividend every year for at least 10 consecutive years. This focus on dividend growth means VIG's current yield is lower (around 1.6%), but the companies it holds have a strong track record of raising their payouts.
VIG tends to be heavier in technology, industrials, and healthcare. Its holdings are companies that prioritise returning growing amounts of cash to shareholders, which often signals strong business fundamentals.
Best for: Investors with a long time horizon who want dividends that grow over time. If you are reinvesting dividends and do not need income right now, VIG's growing payouts can compound significantly over 10 to 20 years.
How much overlap do they have?
These three ETFs target different slices of the dividend market, but there is still some overlap in holdings. You can check the exact overlap between any pair:
If you are considering holding two of these together, checking the overlap first helps you understand whether you are getting meaningful diversification or just doubling up on the same stocks.
Dividend income comparison
Wondering how much income each ETF would generate? The answer depends on how much you invest. As a rough example, $50,000 invested at current yields would produce approximately:
- SCHD: Around $1,750/year
- VYM: Around $1,250/year
- VIG: Around $800/year
These are estimates based on trailing yields and will fluctuate. Use our dividend calculator to model your own scenarios with current data.
Which one should you pick?
Current income is your priority: VYM gives you the broadest exposure to high-yielding stocks with solid diversification across 440+ holdings.
You want a balance of income and quality: SCHD's quality screening combined with a respectable yield makes it the most popular choice for a reason. It aims to deliver both income and capital appreciation.
You are focused on long-term growth: VIG's lower current yield is offset by its focus on companies that consistently grow their dividends. Over long holding periods, this can result in a higher yield on cost and stronger total returns.
You want to hold more than one: SCHD and VIG can complement each other well, giving you both current income and dividend growth. Check the overlap between them to see how much diversification you actually get.
Model your dividend income with our free dividend calculator, no account needed.