The article compares two popular dividend ETFs, Vanguard High Dividend Yield ETF (VYM) and Schwab U.S. Dividend Equity ETF (SCHD), arguing they differ noticeably in how they are built and what they deliver. VYM tracks the FTSE High Dividend Yield Index, but strong gains in its largest holdings have pared its trailing yield back to a respectable but modest 2.35%. SCHD follows the equal-weight Dow Jones U.S. Dividend 100 Index, whose largest holdings have posted only modest gains, keeping its yield just above 3%. The author concludes that most income-seeking investors are arguably better served by SCHD, which is more value-oriented and defensive, while VYM has heavier exposure to healthcare, financial, technology and industrial sectors that could be more vulnerable to AI-led weakness.
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