■ Analysis · July 27, 2026
First Trust Rising Dividend Achievers ETF Outperforms SCHD Over Decade
The First Trust Rising Dividend Achievers ETF (RDVY) has returned 15.96% annually over 10 years, outpacing SCHD's 12.5%, but with higher volatility and a lower yield.
Comparing Two Dividend ETFs
The Schwab U.S. Dividend Equity ETF (SCHD) is a popular choice among dividend investors, offering a 3.3% yield and a low expense ratio of 0.06%. However, another ETF using a similar stock-selection strategy has delivered superior returns over the past decade: the First Trust Rising Dividend Achievers ETF (RDVY).
Both ETFs consider dividend growth, yield, and balance sheet quality in their methodologies, including cash-to-debt ratios, payout ratios, earnings growth trends, and consistent dividend increases. Despite these similarities, their portfolios differ significantly.
Portfolio Composition and Performance
RDVY has larger allocations to financials and technology compared to SCHD, while being underweight in healthcare, energy, and consumer staples. This tilt makes RDVY more growth-oriented and economically sensitive. Over the past 10 years, RDVY has returned an average of 15.96% annually with dividends reinvested, versus 12.5% for SCHD.
Key data points for RDVY include $24 billion in assets under management, a dividend yield of 0.84%, and an expense ratio of 0.47%. Its top holdings include Applied Materials (3.52%), Lam Research (3.15%), and KLA Corporation (2.93%).
Trade-Offs to Consider
While RDVY has outperformed, it comes with trade-offs. The ETF has exhibited about 20% greater volatility than SCHD over the years. Additionally, its dividend yield is a scant 0.8%, making it less suitable for income-focused investors compared to SCHD's 3.3% yield.
SCHD remains a strong dividend ETF, but RDVY's historical performance cannot be ignored. For investors prioritizing total return over current income, RDVY's growth-oriented approach may be appealing.
What It Means for Income Investors
For income investors, the choice between SCHD and RDVY hinges on yield versus total return. SCHD offers a higher yield and lower volatility, while RDVY has delivered stronger total returns with higher risk. Both ETFs have solid dividend histories and methodologies, but investors should align their selection with their individual risk tolerance and income needs.
Reporting based on: The Motley Fool. Figures verified against market data where available.