The Schwab US Dividend Equity ETF (NYSEARCA:SCHD ) has been going through a dry spell for the past couple of years, and many investors have used that opportunity to move into hotter names like the Vanguard Dividend Appreciation Index Fund ETF (NYSEARCA:VIG ) . The latter carries a smaller dividend yield but has performed far better in terms of total return.
First, if you're not familiar with ETFs, or exchange-traded funds, they're funds that invest in a bucket of assets. In the case of SCHD, the fund tracks the Dow Jones U.S. Dividend 100 Index. That index is comprised of high-quality U.S. businesses with at least 10 years of consistent dividend payments, and dividend payments that are deemed to be sustainable.