The First Trust Rising Dividend Achievers ETF (RDVY) returned an average 15.8% annually over the past decade, ahead of Schwab U.S. Dividend Equity ETF (SCHD) at 13.2%; RDVY’s trailing 12-month yield was 0.8%, compared with 3% for SCHD.
SCHD tracks the Dow Jones U.S. Dividend 100 Index, which screens for dividend traits including yield and five-year dividend growth. RDVY follows a Nasdaq index that selects listed companies whose dividends exceed levels from three and five years earlier, while also screening for earnings growth, financial strength and reasonable payout ratios. SCHD’s largest sectors are healthcare (21%), consumer staples (20%) and energy (14%); RDVY’s are financials (30%), technology (26%) and industrials (22%).
The article’s author argues RDVY’s growth focus suits investors seeking faster wealth growth, while SCHD better suits those seeking current income. The article cites Ned Davis Research and Hartford Funds data saying dividend-growth stocks have historically delivered the highest total returns.
