How the iShares Core Dividend Growth ETF and Schwab’s SCHD Compare

DGRO and SCHD are two of the most popular dividend growth ETFs in the US, and over the last 12 years they have finished almost level. From DGRO’s launch in June 2014 to the end of October 2026, DGRO returned about 12.6% a year and SCHD about 12.4% a year, including reinvested dividends.

The similar result hides two very different funds. SCHD, the Schwab U.S. Dividend Equity ETF, holds about 100 high-yielding, financially strong companies. DGRO, the iShares Core Dividend Growth ETF, holds about 390 companies with growing dividends, weighted by how much they pay out.

This guide explains how each fund picks its stocks, what they own, how their costs, yields and dividend growth compare, and how they have performed year by year. It also shows how much cash income each fund actually paid on a $10,000 investment, which fund led in each kind of market, and what a 50/50 split of the two would have returned.

Start Here: Learn With FRC

Financial Regulation Courses (FRC) has no stake in which fund you choose. FRC sells no investments and earns no commission, so this comparison focuses on how each fund works and what that means for an investor.

FRC’s ETF Investing for Beginners course explains how dividend ETFs like DGRO and SCHD work. ETF Investing Strategies covers dividend growth and income approaches in depth, and Advanced ETF Investing goes further into building a portfolio.

FRC’s programs and memberships are open to everyone. FRC’s year-by-year histories of DGRO and SCHD tell each fund’s full story, crash by crash.

DGRO vs SCHD at a Glance

Both funds exclude real estate investment trusts and pay dividends quarterly. The real differences lie in how they choose their companies and how much weight each company gets.

A Brief History of Both Funds

SCHD launched in October 2011 as part of Charles Schwab’s push into low-cost ETFs, arriving weeks after a market correction driven by the European debt crisis and the downgrade of the US credit rating. It grew steadily and became one of the most widely followed dividend funds in the country, and in October 2024 it carried out a 3-for-1 share split.

DGRO followed in June 2014 as part of BlackRock’s iShares Core range of low-cost funds. It was designed to combine dividend growth with dividend sustainability, using a payout ratio screen that few other dividend funds apply.

SCHD is the larger of the two by a wide margin, with about $121 billion in assets against DGRO’s $45 billion. Both have grown into core holdings for many dividend investors.

How DGRO Picks Its Stocks

DGRO tracks the Morningstar US Dividend Growth Index. A company qualifies if it has raised its dividend for at least five years without interruption.

Two screens then remove riskier payers. A company’s dividend must be less than 75% of its expected earnings, and the highest-yielding 10% of eligible stocks are excluded, because a very high yield often signals a falling share price or a payout under strain.

The remaining companies are weighted by the total dollars of dividends they pay, with caps on any single holding. The index is rebuilt every December and rebalanced each quarter.

How SCHD Picks Its Stocks

SCHD tracks the Dow Jones U.S. Dividend 100 Index, which starts with US companies that have paid dividends for at least 10 consecutive years. Unlike DGRO, it does not require the dividend to have risen every year.

Eligible companies are scored on four measures: cash flow to total debt, return on equity, dividend yield and five-year dividend growth rate. The 100 companies with the strongest combined scores make it into the index.

Holdings are weighted by company size, but capped at 4% each and 25% per sector at the yearly rebuild in March. Because dividend yield is one of its four scores, SCHD leans much more towards high-income companies than DGRO does.

What DGRO Owns

With about 390 holdings, DGRO is a broad fund. At the end of September 2026, its top 10 holdings made up only about 27% of the fund, with no single company above about 3.2%.

Those top holdings were Microsoft, Apple, ExxonMobil, AbbVie, Johnson & Johnson, JPMorgan Chase, Broadcom, Procter & Gamble, Philip Morris and Home Depot. Because it weights by dividend dollars, the companies paying the most cash in total sit at the top, whatever their yield.

Financials, technology and healthcare are DGRO’s largest sectors, each recently making up a little under a fifth of the fund. That mix gives DGRO more technology than most dividend funds.

What SCHD Owns

With about 100 holdings, SCHD is concentrated. At the end of September 2026, its top 10 holdings made up about 42% of the fund, with each close to 4%.

Those top holdings were Qualcomm, Texas Instruments, Coca-Cola, Procter & Gamble, Merck, Chevron, Verizon, ConocoPhillips, UnitedHealth Group and Home Depot. The list changes each March as companies’ scores rise and fall.

Consumer staples, healthcare and energy are SCHD’s largest areas, and it holds much less in financial companies than DGRO. Its technology holdings are mainly established chipmakers with sizable dividends, rather than the largest technology giants.

How Much They Overlap

The two funds share some familiar names, including Procter & Gamble, Home Depot, Merck, Coca-Cola, UnitedHealth and PepsiCo. But the overlap is limited: measured by weight, only about a fifth of the two portfolios is the same. DGRO’s two largest holdings, Microsoft and Apple, are not in SCHD at all, because their low yields do not score well in SCHD’s index.

That limited overlap is the main reason their year-by-year returns differ so much. It is also why some investors hold both, using one fund to balance the other.

The Cost: Both Very Low

SCHD charges an expense ratio of 0.06%, and DGRO charges 0.08%. On a $100,000 investment, that is $60 a year for SCHD and $80 for DGRO.

The 0.02 percentage point gap is too small to decide between the funds for most investors. Both trade with tight bid-ask spreads and are available commission-free at most major brokerages.

Dividend Yield

SCHD’s recent yield of about 3.1% is well above DGRO’s of about 1.9%. On a $10,000 investment, that is roughly $310 a year in income from SCHD, against about $190 from DGRO.

The gap comes straight from their designs. SCHD scores companies on yield and favors high payers, while DGRO deliberately excludes the highest yielders and gives large weights to companies such as Microsoft and Apple, whose yields are low.

Investors who need the most income from their money today tend to look at SCHD first. Those who care less about current income, and more about total return, often find DGRO’s lower yield acceptable.

Dividend Growth

Both funds have strong records of rising payouts, and neither has cut its annual dividend since DGRO launched. From 2015 to 2025, SCHD’s dividend per share grew about 10.6% a year on average, roughly 2.7 times over, while DGRO’s grew about 8.4% a year, roughly 2.2 times over.

SCHD’s faster growth partly reflects its scoring, which rewards five-year dividend growth directly. DGRO’s growth has been steadier, with increases every year from 2016 to 2025 ranging from about 1.4% to about 14.9%.

For long-term investors, both funds show compound interest at work, with income rising year after year on the same number of shares. SCHD has combined a higher starting yield with faster growth, which makes it the stronger income fund of the two.

Performance Year by Year

All figures are total returns with dividends reinvested. Over 11 full calendar years, DGRO led in six and SCHD in five, and the lead has swung back and forth rather than staying with either fund.

DGRO pulled ahead from 2023 to 2025, when technology companies led the market and SCHD held very few of them. SCHD led in 2020 to 2022 and then surged in 2026, when its energy, healthcare and consumer staples holdings came into favor.

Over the 10 calendar years from 2016 to 2025, DGRO returned about 13.1% a year against SCHD’s 11.5%. Over the five years from 2021 to 2025, DGRO returned about 11.7% a year against SCHD’s 8.9%. SCHD’s 2026 surge has since closed most of that gap.

The Scorecard: 2015 to 2025

These figures cover the 11 full calendar years when both funds were running, so the comparison is like for like. On average, the two funds’ results differed by about 4 percentage points a year, a reminder of how differently they are built.

Which Fund Led in Which Kind of Market

The pattern is consistent. When the largest technology companies lead, DGRO tends to come out ahead, and when value, energy and high-dividend stocks lead, SCHD usually does.

If You Had Taken the Dividends as Cash

Many dividend investors spend their income rather than reinvesting it. The table below shows what $10,000 invested in each fund at the start of 2015 would have paid out in cash each year, with no dividends reinvested.

SCHD paid more income in every single year, and the gap widened over time. By 2025, the SCHD investor was collecting about 7.9% a year on their original $10,000, against about 5.5% for the DGRO investor, and had received about $5,660 in total income over the 11 years, against about $4,210 from DGRO.

The share prices tell the other half of the story. By the end of 2025, the DGRO shares were worth about $26,170 and the SCHD shares about $20,660, so the DGRO investor finished with more in total, about $30,380 against $26,310, counting both the shares and the cash collected.

That is the trade-off between the two funds in one picture. SCHD delivered more spendable income every year, while DGRO delivered more growth in the value of the investment itself, at least until SCHD’s strong 2026.

Bear Markets and Crashes

In the 2020 COVID crash, DGRO fell about 35.1% from its February peak and SCHD about 33.4% from its January peak, including dividends. Both bottomed on March 23, 2020, and both had recovered by late 2020.

In the 2022 bear market, when the S&P 500 lost about 18.2%, SCHD lost only about 3.3% and DGRO about 7.9%. SCHD’s heavier energy and consumer staples weighting protected it better as interest rates rose.

In late 2018, the pattern reversed. DGRO lost about 2.4% for the year and SCHD about 5.6%, as SCHD’s industrial and energy holdings were hit by trade worries and falling oil prices.

Both funds have fallen less than the S&P 500 in most downturns since 2014, but neither avoided sharp losses in 2020. FRC’s guide to growth stocks vs value stocks explains why different styles lead in different markets.

Volatility and Concentration

SCHD’s 100 holdings, each near 4% at the top, make it more concentrated than DGRO. When several of its large positions struggle together, as its energy and consumer holdings did in 2023, the fund feels it strongly.

DGRO spreads its money across about 390 companies, with its largest holding near 3%. That breadth has given it steadier relative results, and in a comparison of the four major dividend ETFs, it is the only one that has never finished last in a full calendar year.

The trade-off is that DGRO’s breadth also limits its upside when dividend-heavy sectors surge. In 2026, SCHD’s concentrated bets on energy and healthcare produced a gain of more than 34%, nearly twice DGRO’s.

Common Questions About DGRO and SCHD

Has DGRO beaten SCHD since it launched? Only just. From mid-June 2014 to the end of October 2026, $10,000 in DGRO grew to about $43,600, against about $42,500 in SCHD. DGRO was further ahead at the end of 2025, but SCHD’s surge in 2026 closed most of the gap.

How much do DGRO and SCHD overlap? Around a fifth of the two portfolios overlaps by weight. Many smaller names appear in both funds, but the largest positions are different, which is why their returns diverge so often.

Which pays more income, DGRO or SCHD? SCHD, by a wide margin. Its recent yield of about 3.1% is roughly 60% higher than DGRO’s of about 1.9%, and its dividend has also grown faster since 2015.

Which has performed better over time? Since DGRO launched in June 2014, the two are almost level, at about 12.6% a year for DGRO and 12.4% for SCHD to the end of October 2026. Over the 10 calendar years from 2016 to 2025, DGRO was ahead, but SCHD’s strong 2026 has narrowed the gap.

Which is more diversified? DGRO, with about 390 holdings against SCHD’s 100, and a top 10 that makes up about 27% of the fund against about 42% for SCHD.

Which holds more technology? DGRO. It owns Microsoft and Apple as its two largest holdings, while SCHD’s technology exposure comes mainly from chipmakers with sizable dividends, such as Qualcomm and Texas Instruments.

Is either fund safer? Neither is risk-free. Both fell about a third in the 2020 crash, SCHD held up better in 2022, and DGRO held up better in 2018.

How Each Fund Is Taxed

Both funds exclude REITs, and most of their dividends have been qualified dividends, taxed at the lower long-term capital gains rates. Both have rarely, if ever, distributed capital gains, as is typical for index ETFs.

The main tax difference comes from yield. SCHD’s higher yield produces more taxable income each year in a regular brokerage account, while DGRO’s lower yield leaves more of its return as unrealized growth, which is not taxed until the shares are sold.

FRC’s guides to qualified vs non-qualified dividends and how to choose tax-efficient ETFs explain how dividend income is taxed. Holding a high-yield fund such as SCHD in an IRA or 401(k) is one way investors reduce that annual tax bill.

Which Investors Each Fund Tends to Suit

SCHD tends to appeal to investors who want higher income today, such as retirees living on their dividends. Its 3% yield, fast dividend growth and focus on financially strong companies make it a natural core holding for an income portfolio.

DGRO tends to appeal to investors who want dividend growth with broader diversification and more technology exposure. It suits those still building wealth, who care more about total return than current income.

Neither fund is the right choice for everyone. The decision usually comes down to how much income an investor needs now, how much concentration they are comfortable with, and whether they want more or less exposure to the largest technology companies.

Holding Both

Because their holdings overlap only partly, many investors hold DGRO and SCHD together. The combination blends SCHD’s higher yield and value tilt with DGRO’s breadth and technology exposure.

Their records show why that can work. In years when one lagged badly, such as SCHD in 2023 and 2025, or DGRO in 2026, the other often did much better, which smooths the overall ride.

A simple 50/50 split, rebalanced once a year, would have turned $10,000 at the start of 2015 into about $31,840 by the end of 2025, a return of about 11.1% a year. That sits between DGRO’s $33,960 and SCHD’s $29,690, with a worst year of about −5.6% in 2022 and a yield between the two funds.

The trade-off is some overlap in names and a slightly more complex portfolio. Investors who hold both should check their combined weightings in energy, consumer staples and technology from time to time.

How They Compare With Other Dividend ETFs

DGRO and SCHD are two of the four most popular US dividend ETFs, alongside VYM and VIG. VYM holds the higher-yielding half of the market, while VIG requires 10 years of dividend increases and avoids the highest yielders.

FRC’s comparisons of SCHD vs VYM, SCHD vs VIG and VYM vs VIG cover those pairings. For income-focused covered call funds, FRC’s comparison of JEPI vs SCHD explains the trade-offs.

Against the S&P 500, both funds have trailed over most long periods. FRC’s VOO performance history shows how the broad market performed over the same years.

Is Your Money Safe in DGRO and SCHD?

Both funds are regulated investment companies overseen by the SEC, with their holdings kept by independent custodians and separate from BlackRock’s and Schwab’s own assets. FRC’s guide to Is Charles Schwab Safe? explains how Schwab is structured and regulated.

When you hold either fund at a SIPC member brokerage, your account is protected up to $500,000, including $250,000 in cash, if the brokerage fails and assets are missing. This protection does not cover market losses, such as the falls of about a third both funds suffered in 2020.

Keep Learning

The FRC dictionary is more than a dictionary. It is a library of explainer videos, written explanations and on-page quizzes, so you can open any term, such as ex-dividend or diversification, and go deeper whenever something is unclear.

FRC’s Investing for Beginners guide and its guide to dollar-cost averaging vs lump sum are natural next steps for anyone building a dividend portfolio.

The Bottom Line

DGRO and SCHD have delivered almost identical long-term returns since 2014, but by very different routes. SCHD offers a higher yield, faster dividend growth and a concentrated bet on financially strong, high-income companies, while DGRO offers broader diversification, more technology and steadier relative results.

SCHD tends to fit investors who put income today first, and DGRO those who put broad dividend growth and total return first. Many investors hold both, and their history suggests the two have often balanced each other out.