NEW YORK – August 3, 2026 – The performance gap among popular dividend exchange-traded funds (ETFs) is more about sector allocation than yield alone, according to recent data. Fidelity High Dividend ETF (FDVV) has outperformed Schwab U.S. Dividend Equity ETF (SCHD) by 5.12 percentage points on a five-year annualized net asset value (NAV) basis, yet its SEC yield is only 53 basis points lower. Meanwhile, First Trust Rising Dividend Achievers ETF (RDVY) has also beaten SCHD but offers a significantly lower yield, highlighting the trade-offs investors face.
As of June 30, 2026, FDVV delivered a five-year annualized NAV return of 13.63%, compared to SCHD's 8.51%. RDVY posted a 12.94% return over the same period, 4.43 percentage points ahead of SCHD. However, RDVY's current SEC yield stands at just 0.82%, a 2.45 percentage point shortfall versus SCHD's 3.27%. For an investor with $100,000, that translates to roughly $530 less annual income from FDVV and about $2,450 less from RDVY, based on simple calculations.
The divergence is rooted in portfolio construction. SCHD leans defensive, with 55.17% of its holdings in health care, staples, and energy. In contrast, RDVY allocates 77.67% to technology, financials, and industrials, while FDVV sits in between with 50.90% in those growth-oriented sectors. These sector tilts have driven returns over different periods, with RDVY outperforming in the one- and three-year frames, while FDVV has led over five years.
Fund guidelines explain the differences. SCHD screens for dividend reliability and financial stability, resulting in a portfolio of 103 large-value stocks with a defensive tilt. FDVV weights 70% to yield, 15% to payout ratio, and 15% to dividend growth, allowing up to 40% sector concentration, which has led to its tech and financials exposure. RDVY requires rising dividends, earnings growth, a cash-to-debt ratio above 50%, and a payout ratio no higher than 65%, producing a portfolio of 71 dividend growers concentrated in cyclical sectors.
Market Performance and Rankings
On Monday, U.S. markets opened higher. As of midday, the SPDR S&P 500 ETF (SPY) was up 1.20%, while SCHD advanced 0.24%, FDVV added 0.59%, and RDVY gained 0.52%. Over the past year, RDVY surged 30.45%, FDVV gained 19.64%, and SCHD rose 24.08%. Three-year annualized returns show RDVY at 21.63%, FDVV at 18.68%, and SCHD at 13.52%. Ten-year data, where available, shows SCHD at 12.37% and RDVY at 16.65%.
The shifting rankings underscore how sector exposure influences performance. Technology and cyclical stocks have driven recent gains, benefiting RDVY and FDVV, while SCHD's defensive posture has lagged in growth phases but may offer stability in downturns.
Income and Costs
For income-focused investors, SCHD offers the highest current yield at 3.27%, translating to $3,270 per $100,000 invested annually. FDVV yields 2.74%, or $2,740, while RDVY yields just 0.82%, or $820. Expense ratios also vary: SCHD is cheapest at 0.06%, FDVV charges 0.15%, and RDVY is highest at 0.47%. Net assets reflect investor preferences: SCHD has $104.16 billion, RDVY $24.89 billion, and FDVV $9.74 billion.
David Dierking, a CFA and ETF expert, described RDVY as “not really an income investment at all,” noting its low yield aligns with a dividend-growth strategy rather than income generation. This perspective is echoed in recent analyses from Seeking Alpha, 24/7 Wall St., and The Motley Fool.
Risks and Outlook
Each fund carries sector-specific risks. FDVV's 27.6% technology allocation could suffer if growth stocks decline. RDVY's emphasis on financials and industrials adds cyclical exposure. SCHD may underperform when defensive stocks weaken. Dividend payments are not guaranteed and can be reduced.
Data as of June 30 for SCHD and FDVV, and July 31 for RDVY, show no clear overall winner. SCHD provides the highest income and lowest costs. FDVV offers a balanced mix of return and yield. RDVY delivers faster growth but minimal current income. Investors should align their choices with their income needs and risk tolerance.
