SCHD vs. HDV: Which Dividend ETF Is the Better Buy for Long-Term Investors?

The Schwab U.S. Dividend Equity ETF (SCHD 0.14%) offers a lower expense ratio and higher yield than the iShares Core High Dividend ETF (HDV 0.44%), while providing broader diversification across 103 holdings.

Income-seeking investors frequently compare these two popular funds for their robust dividends and their focus on high-quality U.S. equities. While both ETFs prioritize income generation, they differ significantly in their sector weights, historical volatility, and overall concentration.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

SCHD is slightly cheaper for long-term investors, carrying a 0.06% expense ratio compared to HDV’s 0.08%. SCHD also offers a higher payout, with a 3.25% dividend yield vs. HDV’s 2.91%

Performance & risk comparison

What's inside

Launched in 2011, SCHD targets sustainable dividend-paying companies by tracking an index that screens for financial strength and dividend consistency. It maintains a diversified portfolio of 103 holdings, offering a blend of value and quality. Its largest sector allocations include Technology at 19.4%, Consumer Defensive at 18.5%, and Healthcare at 18.4%. Top holdings include Qualcomm (QCOM +6.52%) at 6.7%, Texas Instruments (TXN +6.95%) at 5.9%, and UnitedHealth Group (UNH +0.31%) at 5.1%.

Also launched in 2011, HDV is more concentrated, with 75 holdings, and focuses specifically on companies with high dividend yields. The fund prioritizes defensive sectors, with heavy allocations in Consumer Defensive at 24.2%, Energy at 21.0%, and Healthcare at 17.0%. Its largest positions include Exxon Mobil (XOM 2.08%) at 8.0%, Chevron (CVX 2.22%) at 6.2%, and Johnson & Johnson (JNJ 2.48%) at 5.7%.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investors

The choice between SCHD and HDV ultimately comes down to what you want your dividend ETF to do in a portfolio -- and how much volatility you're willing to endure.

SCHD's 19% allocation to technology is notable for a dividend fund. That's a meaningful tilt toward a sector that -- while not traditionally associated with income -- has produced a growing cohort of dividend payers in recent years, including top holdings Texas Instruments and Qualcomm. The result is a fund that participates more in tech-driven market rallies, which has historically been a tailwind. The trade-off: tech exposure also means greater price sensitivity, as reflected in SCHD's higher beta.

HDV takes a different approach. Its heavy weighting toward energy giants like Exxon Mobil and Chevron, combined with deep consumer defensive exposure, gives the fund a genuinely defensive character -- which can be helpful in volatile or recessionary markets. HDV's lower beta of 0.33 means it tends to move significantly less than the broader market. The fund's higher historical 5-year total returns may also surprise investors who assume a more defensive posture means leaving gains on the table; energy's strong run in recent years has contributed meaningfully to HDV’s performance.

Neither fund is a bad choice. For investors who want income with a growth tilt and low cost, SCHD is hard to beat with its 0.06% expense ratio. For those who prioritize capital preservation and sector defensiveness -- particularly retirees or near-retirees building income-focused portfolios -- HDV's steadier ride may be worth the modest extra cost and slightly lower yield.