"The Schwab US Dividend Equity ETF (NYSEARCA:SCHD ) has been going through a dry spell for the past couple of years, and many investors have used that opportunity to move into hotter names like the Vanguard Dividend Appreciation Index Fund ETF (NYSEARCA:VIG ) . The latter carries a smaller dividend yield but has performed far better in terms of total return."
"That said, more near-term performance can create a "mirage" and lure you into making a bad investment decision. If you truly want to know if you should SCHD or VIG, the best course of action would be to dig deeper. I'll be doing just that in this article. Both VIG and SCHD come with interesting details, and their histories are worth looking into before choosing one over the other. Let's start with SCHD."
SCHD yields 3.61% and has historically delivered both a strong dividend and capital appreciation. Performance stalled from December 2021 through December 2021 with almost no capital gains, though recent acceleration has begun. Reinvested dividends narrow the performance gap versus competitors, and over longer horizons SCHD remains competitive or ahead. SCHD charges a low 0.06% expense ratio ($6 per $10,000). VIG has a smaller dividend yield but stronger recent total-return performance, which can create a misleading near-term impression for investors choosing between income and growth-oriented dividend ETFs.
Read at 24/7 Wall St.
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