Schwab U.S. Dividend Quality ETF (SCHD) Offers Higher Yield While Fidelity High Dividend ETF (FDVV) Leans Into Tech
Key Points
SCHD and FDVV diverge on sector tilts, yield, and fees.
Schwab U.S. Dividend Equity ETF (SCHD) offers a higher payout and lower costs.
Fidelity High Dividend ETF (FDVV) has a stronger tilt toward technology.
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FDVV vs. SCHD: Higher Yield and Lower Fees or Tech Tilt?
Fidelity High Dividend ETF (NYSEMKT:FDVV) and Schwab U.S. Dividend Equity ETF (NYSEMKT:SCHD) both target U.S. companies with attractive dividend profiles, but their approaches and makeup differ.
This comparison highlights their cost, performance, sector exposures, and structural details to help clarify which may better fit a given dividend-focused strategy.
Snapshot (cost & size)
| Metric | FDVV | SCHD |
|---|---|---|
| Issuer | Fidelity | Schwab |
| Expense ratio | 0.16% | 0.06% |
| 1-yr return (as of Oct. 27, 2025) | 10.9% | (4.2%) |
| Dividend yield | 3.0% | 3.8% |
| Beta | 0.90 | 0.79 |
| AUM | $7.1 billion | $70.2 billion |
Beta measures price volatility relative to the S&P 500; figures are based on daily returns.
SCHD is more affordable, with an expense ratio just 0.06% compared to FDVV’s 0.16%.
Performance & risk comparison
| Metric | FDVV | SCHD |
|---|---|---|
| Max drawdown (5 y) | (20.19%) | (16.86%) |
| Growth of $1,000 over 5 years | $2,419 | $1,716 |
What's inside
Schwab U.S. Dividend Equity ETF tracks the Dow Jones U.S. Dividend 100 Index and holds 103 companies, focusing on Energy (20%), Consumer Defensive (19%), and Healthcare (16%).
Its holdings include AbbVie (NYSE:ABBV), Cisco Systems (NASDAQ:CSCO), and Merck & Co. (NYSE:MRK). The fund has a 14.0-year track record.
Fidelity High Dividend ETF, by contrast, leans more into Technology (25%), Financial Services (19%), and Consumer Defensive (13%).
Its top holdings are NVIDIA (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), and Apple (NASDAQ:AAPL).
For more guidance on ETF investing, check out the full guide at this link.
Foolish take
Over the last decade, the Fidelity High Dividend ETF has generated total returns of 13% annually, while the Schwab U.S. Dividend Equity ETF produced 11% growth.
While these both slightly trailed the S&P 500's mark of 14% over the same time, I'd argue their results are impressive considering both ETFs focus on dividend stocks, which typically have slower growth. Furthermore, these annualized returns are well above the market's uber-long-term average of around 10%.
I wouldn't argue that one ETF is markedly better than the other, as they each offer hefty dividend yields, low expense ratios, below-market betas, and are issued by top-tier financial firms.
However, if an investor already has exposure to the S&P 500 -- and therefore a higher level of indirect exposure to the Magnificent Seven -- buying FDVV may not be the right move. Its three biggest holdings are members of the Magnificent Seven club and account for nearly 18% of the fund's assets.
Meanwhile, SCHD has more exposure to the energy, consumer defensive, and healthcare sectors, making most of its holdings non-discretionary and home to essential products or services.
Personally, I already have plenty of exposure to the technology sector and the Magnificent Seven as a whole, so if I were to pick between the two, I'd go with SCHD and its higher dividend yield and more defensive holdings, which I don't have as much of.
Glossary
ETF (Exchange-Traded Fund): An investment fund traded on stock exchanges, holding a basket of assets like stocks or bonds.
Dividend yield: The annual dividend income expressed as a percentage of the investment's current price.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges to cover its operating costs.
Beta: A measure of a fund's volatility relative to the overall market; values above 1 indicate higher volatility.
AUM (Assets Under Management): The total market value of assets that a fund manages on behalf of investors.
Max drawdown: The largest observed percentage drop from a fund's peak value to its lowest point over a specific period.
Sector tilt: When a fund allocates more of its assets to certain industry sectors compared to a benchmark.
Consumer Defensive: Companies that produce essential goods like food, beverages, and household products, often resilient during economic downturns.
Growth of $1,000: The increase in value of a $1,000 investment over a specified period, reflecting total returns.
Index (in ETF context): A benchmark representing a group of securities that a fund may track or replicate.
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Josh Kohn-Lindquist has positions in Nvidia. The Motley Fool has positions in and recommends AbbVie, Apple, Cisco Systems, Merck, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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