What if I told you that the dividend ETF everyone hails as the “king,” SCHD, is getting absolutely blown out of the water by four other funds in 2025? 😱
Yes, you read that right. While SCHD investors are celebrating single-digit gains—just 2.38% to 4.25% this year—these four ETFs are delivering double-digit returns that are making waves across Wall Street.
By the end of this article, you’ll discover why 2025 could be the year dividend investing changes forever, which ETFs are the true champions, and the hidden risks you must know before investing.
The End of SCHD Dominance?
For years, SCHD was the undisputed champion of dividend ETFs. Trusted, reliable, seemingly unbeatable. Financial advisers recommended it without hesitation. YouTube creators raved about it. Retail investors poured billions into it, believing it was the ultimate dividend solution.
But 2025? That’s a whole different story.
Four ETFs emerged with returns exceeding 10%, leaving SCHD in the dust. Imagine this: if you had $100,000 invested in SCHD versus the top performer this year, you’d be looking at a difference of over $12,000. 💸
This isn’t just a one-year story. It’s a sign of a fundamental shift in dividend investing.
1️⃣ Vanguard Dividend Appreciation ETF (VIG) – 16.26% 🚀
VIG is leading the pack with 16.26% returns, a massive 12–14 percentage point advantage over SCHD.
What makes VIG unique? Unlike traditional high-yield ETFs, it only invests in companies that have raised dividends for 10+ consecutive years—the elite dividend aristocrats. These companies grow their payouts through recessions, market crashes, and economic uncertainty.
Current Yield: 1.73%
10-Year Dividend CAGR: 9.05%
Ultra-Low Expense Ratio: 0.05%
Assets Under Management: $97.8B–$112.6B
VIG perfectly capitalized on the Federal Reserve’s rate cuts in 2025. Dividend growth suddenly became more valuable than high current yield, and VIG’s aristocrats were ready to shine.
2️⃣ iShares Core Dividend Growth ETF (DGRO) – 11.75% 🔥
DGRO is what I call the “balanced beast” of dividend ETFs.
It focuses on sustainable dividend growth, screening companies for at least 5 years of increasing payouts and maintaining a maximum 75% payout ratio.
Top holdings include:
Broadcom – 3.57%
Apple – 3.25%
JP Morgan Chase – 3.21%
Current Yield: 2.05–2.19%
Expense Ratio: 0.08%
AUM: $33.7B–$35.1B
DGRO embraces modern dividend stocks in tech and finance—sectors SCHD often underweights. This forward-thinking approach is why DGRO is triple SCHD’s performance in 2025.
3️⃣ Vanguard High Dividend Yield ETF (VYM) – 11.18% 🌐
VYM proves that diversification wins. With 533 holdings and $65.5B–$79.5B in assets, VYM spreads risk while capturing opportunities across the market:
Financials – 22.6%
Technology – 11.2%
Healthcare – 10.9%
Current Yield: 2.49%
VYM’s broad exposure allowed it to ride multiple waves—financials, tech rallies, and consumer staples—while SCHD’s concentrated strategy lagged behind.
4️⃣ Fidelity High Dividend ETF (FDV) – 10.5% 💎
FDV is the surprise story of 2025.
With only 107 holdings and a 25.7% allocation to tech, FDV boldly bets on the future dividend aristocrats of tomorrow:
Top holdings:
Apple – 5.9%
Nvidia – 5.6%
Microsoft – 5.2%
Expense Ratio: 0.16%
Yes, FDV carries higher risk, including volatility and dividend cuts, but its concentrated tech-heavy approach is paying off handsomely in today’s market.
Why Are These ETFs Crushing SCHD?
The Federal Reserve’s September 2025 rate cuts changed everything. Lower rates made dividend growth more valuable than high yield. Tech and financial sectors surged, and these four ETFs were perfectly positioned.
Meanwhile, SCHD, with its traditional defensive strategy, fell behind.
Risks You Can’t Ignore ⚠️
Before switching from SCHD, remember:
VIG: Low current yield may not suit retirees needing cash flow.
DGRO: Tech exposure could backfire if sectors rotate.
VYM: High financial allocation could be hit by rate changes.
FDV: Concentrated tech bets and higher volatility.
Markets change, and these ETFs might not outperform SCHD forever.
Who Should Pick Which ETF?
Dividend growth focus: VIG ✅
Balanced yield + growth: DGRO ✅
Diversification + steady income: VYM ✅
Tech-heavy high growth: FDV ✅
The dividend revolution is here. Are you ready to ride the wave? 🌊
💡 Ready to invest in these top-performing ETFs? Start with Moomoo today and seize the opportunity to grow your portfolio in 2025!
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