DGRO's looser 5-year dividend screen beat SCHD's stricter 10-year filter, returning 257% versus 235% over the past decade. SCHD holds just 103 stocks with QUALCOMM near 7% of the fund, while VIG and DGRO both offer broader, less concentrated exposure. It sounds nuts, but SoFi1 is giving new Active Invest users up to $3,000 in stock for a limited time, and all it takes is a $50 deposit to get started.2 See for yourself (Sponsor) If you bought Schwab's dividend ETF instead of iShares' version a decade ago, the "quality" screen you paid for did something you were never told about: it filtered out a chunk of the winners.
Over the past ten years, iShares Core Dividend Growth ETF (NYSEARCA:DGRO) returned 257.35% on price, while Schwab US Dividend Equity ETF (NYSEARCA:SCHD) returned 235.33%. That gap is the hidden cost of a stricter screen. DGRO's headline fee is small.
The fund's most recent summary prospectus lists a net expense ratio of 0.08%, equal to roughly $8 annually for every $10,000 invested. SCHD is even cheaper at 0.06%. That said, the 0.02-percentage-point difference is unlikely to have a meaningful impact on long-term comparative performance.
The more important difference is how the two funds select stocks. SCHD requires companies to have at least 10 consecutive years of dividend payments before ranking eligible stocks based on cash flow to debt, return on equity, dividend yield, and five-year dividend growth. That methodology gives SCHD a deliberate quality and income tilt, but it also excludes companies that have shorter dividend histories regardless of their earnings growth or financial strength.
That distinction has mattered recently. Over the past five years, DGRO returned 69.56%, compared with 58.06% for SCHD. The performance gap illustrates the opportunity cost that can come with SCHD's more restrictive screening process.
SoFi Active Invest is offering a limited-time promotion. Open an account, fund it with $50 or more, and you could receive up to $3,000 in complimentary stock for Active Invest accounts. See for yourself by clicking here now. (Sponsor) DGRO's broader eligibility requirements allow it to hold significantly more companies.
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