Dividend investing has exploded in popularity over the last decade. Many investors want a portfolio that generates passive income while still growing over time. Two ETFs often mentioned in this space are iShares Core Dividend Growth ETF (DGRO) and Schwab U.S. Dividend Equity ETF (SCHD).
But here’s the surprising part…
A dividend ETF that many investors overlook has actually outperformed SCHD over the last 1 year, 5 years, and even 10 years.
And it’s not the one most people expect.
Let’s break down the real story behind DGRO vs SCHD and why this comparison is becoming one of the hottest debates among dividend investors.
(Disclaimer: This article is for educational purposes only and not financial advice. Always do your own research before investing.)
How SCHD Selects Its Stocks
Schwab U.S. Dividend Equity ETF (SCHD) follows the Dow Jones U.S. Dividend 100 Index.
To qualify, a company must:
Pay dividends for at least 10 consecutive years
Pass strict quality filters such as:
Return on Equity
Cash Flow to Debt Ratio
Dividend Yield
5-Year Dividend Growth Rate
Only the top 100 companies make the cut.
Because of this strict screening, SCHD holds around 100 high-quality dividend companies. The strategy is simple:
Focus on strong companies that pay reliable and growing dividends.
That’s why SCHD is often considered one of the best ETFs for income-focused investors.
Why DGRO Is Different
iShares Core Dividend Growth ETF (DGRO) takes a very different approach.
Instead of requiring 10 years of dividends, DGRO only requires 5 years of dividend growth.
But here’s the big difference:
DGRO allows many more companies into the fund.
The result?
DGRO holds about 445 stocks
More diversification
Greater exposure to growth sectors
This wider net allows DGRO to include major growth companies like:
Apple Inc.
Microsoft
Broadcom
Even though these companies may have lower dividend yields, their stock prices have grown significantly over time.
Dividend Income: SCHD Wins
If your main goal is income today, SCHD clearly leads.
Typical dividend yields:
SCHD: ~3.3%
DGRO: ~2%
Example with $100,000 investment:
| ETF | Annual Dividend |
|---|---|
| SCHD | ~$3,370 |
| DGRO | ~$2,000 |
That’s $1,370 more income every year from SCHD.
For retirees who rely on dividend income to pay bills, that difference can be huge.
Total Return: DGRO Pulls Ahead
Now here’s where things get interesting.
Despite lower yield and slower dividend growth, DGRO has delivered stronger total returns.
Historical average returns:
| Time Period | DGRO | SCHD |
|---|---|---|
| 1 Year | ~17% | ~15% |
| 5 Years | ~12.2% | ~9.7% |
| 10 Years | ~14.3% | ~12.8% |
Why?
Because DGRO includes more growth-oriented dividend companies, especially technology leaders.
When tech stocks rise, DGRO benefits more than SCHD.
Wealth Growth Example
Let’s imagine investing $100,000.
After 5 years:
DGRO could grow to about $178,000
SCHD could reach around $158,000
That’s a $20,000 difference.
After 10 years:
DGRO could reach around $384,000
SCHD could grow to about $332,000
A potential $50,000 gap.
However, SCHD investors would have collected much more dividend cash along the way.
The Real Question Investors Should Ask
The real debate is not:
“Which ETF is better?”
The real question is:
What stage of investing are you in?
1️⃣ Growth Phase
Investors building wealth may prefer DGRO because of its stronger long-term growth potential.
2️⃣ Income Phase
Retirees may prefer SCHD because it generates higher dividends today.
3️⃣ Transition Phase
Many investors combine both.
Example portfolio:
60% DGRO
40% SCHD
This strategy balances growth and income.
The Cost Advantage
Both ETFs are extremely cheap.
SCHD expense ratio: 0.06%
DGRO expense ratio: 0.08%
A combined portfolio averages about 0.07%, which is still cheaper than most actively managed funds.
How to Buy DGRO or SCHD Easily
If you want to invest in ETFs like DGRO or SCHD, one of the easiest platforms used by global investors today is Moomoo.
With Moomoo you can:
✅ Buy US ETFs like DGRO & SCHD
✅ Access global markets
✅ Use powerful trading tools and charts
✅ Start investing with a beginner-friendly platform
👉 Open your account and explore these ETFs here:
https://j.moomoo.com/0xFRE4
Final Thoughts
Both DGRO and SCHD are excellent dividend ETFs.
SCHD: Higher income today
DGRO: Stronger long-term growth
The smartest strategy for many investors may not be choosing one — but using both strategically.
Because in the end, the best dividend strategy is the one that fits your financial timeline and investment goals. 📈
