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Dividend ETFs: Schwab vs. Fidelity
16 Aug
Summary
- Schwab fund is cheaper with lower expense ratio.
- Schwab offers a higher dividend payout.
- Fidelity fund leans into technology and growth stocks.
Investors seeking dividend income can consider two distinct exchange-traded funds: the Schwab U.S. Dividend Equity ETF (SCHD) and the Fidelity High Dividend ETF (FDVV).
SCHD provides a cost-efficient and stable investment path, boasting a 0.06% expense ratio and a higher trailing-12-month dividend yield. This fund strategically invests in defensive sectors, with significant allocations to healthcare, consumer defensive, and energy. Its top holdings include established companies like Abbott Laboratories, Amgen, and Merck.
Conversely, FDVV adopts a growth-oriented strategy, concentrating heavily on technology stocks, which comprise 29% of its portfolio. While this approach can capture technology upside, it typically entails greater volatility. Its leading holdings feature tech giants such as Nvidia, Apple, and Microsoft. Launched in 2016, FDVV has a higher expense ratio of 0.15% compared to SCHD's 0.06%.
