With long-term bond yields now above 5%, fixed income offers a real alternative to dividend stock ETFs. The author prefers the Schwab U.S. Dividend Equity ETF (SCHD) over the Vanguard High Dividend Yield ETF (VYM): SCHD has outperformed VYM by more than 12% year-to-date and yields 3.3%, versus 2.4% for VYM. SCHD screens stocks on balance-sheet strength, historical dividend growth and yield, while VYM selects purely on yield. The article notes VYM has larger allocations to rate-sensitive financials, utilities and tech, whereas SCHD is overweight consumer staples and healthcare, which it considers more defensive.
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- SCHD Is Crushing the Vanguard High Dividend Yield ETF (VYM) This Year. I Predict That Advantage Is About to Fade.
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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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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The article suggests three short-term U.S. Treasury ETFs to hold a $40,000 expense due in three years for a 68-year-old, ordered by when the money is needed: BILS, VGSH and STIP. BILS holds Treasury bills maturing in 3 to 12 months and had about $3.9 billion in net assets as of June 30; VGSH holds Treasuries maturing in 1 to 3 years with a 0.03% expense ratio; STIP holds TIPS maturing in under five years, whose principal adjusts with CPI. The piece stresses that funds have no maturity date, so the amount received depends on the share price when sold, unlike an individual Treasury or a CD that matures on a set date. All three hold only U.S. government debt, can be sold on any trading day, pay monthly income, and can still lose value.
- Interest on fixed savings accounts hits three - year high : Should you snap one up ?
Interest rates on fixed-rate savings bonds have reached a three-year high, with all top fixed-rate accounts paying 5% or more for the first time since 2023, according to Moneyfacts. Independent rate tables show GB Bank's five-year taxable fixed bond at 5.37%, while Shawbrook Bank's best tax-free Isa pays 5.25% on a five-year fix. The average one-year fixed rate rose to 4.41% and the longer-term rate to 4.49%, both after consecutive monthly increases, while the number of savings deals hit an all-time high of 2,654 in October 2026. The article urges savers to check their rates, noting that some high-street banks such as Barclays and NatWest pay just 1% on easy-access savings, whereas Hodge Bank offers 4.01%.
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