The Schwab U.S. Dividend Equity ETF (SCHD) is up 21.7% year to date versus 10.9% for the Vanguard High Dividend Yield ETF (VYM), and yields 3.2% compared with 2.4%. Its strong return is largely due to a 14.1% energy weighting, well above the S&P 500's 3.4%, as the energy sector gained 50.2% this year, although SCHD has cut its energy stake from 23.9% in late March. SCHD rebalances quarterly with a 40.6% portfolio turnover rate and now has heavy weightings in healthcare (20.7%) and consumer staples (20.4%). VYM, by contrast, keeps its largest holding, Broadcom at 6.9%, even though Broadcom's yield has fallen to 0.7%, and has more balanced sectors including 21.1% in financials and 13.7% in technology. The author argues VYM is the better long-term buy because its broader mix includes sectors that tend to grow faster over the long term.
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