ETF Comparison: Schwab US Dividend Equity ETF (SCHD) Versus WisdomTree U.S. Quality Dividend Growth Fund (DGRW)

SCHD vs DGRW: Total Cost of Ownership

SCHD comes in with an ultra-low 0.06% expense ratio, one of the cheapest in the entire dividend ETF universe. DGRW, while still reasonable, charges 0.28%, more than four times as much. On a $10,000 investment, that's the difference between paying $6 a year versus $28.

But management fees aren’t the only cost to consider. When trading ETFs, you also pay an embedded cost via the bid-ask spread, which is the difference between what buyers will pay and what sellers will accept. Here, SCHD and DGRW are nearly identical. SCHD has an average 30-day bid-ask spread of 0.038%, while DGRW sits at 0.037%.

Verdict: Put it all together, and SCHD is cheaper by a mile. DGRW isn’t expensive by any stretch, but it does cost more than many of its peers.

SCHD vs DGRW: Methodology and Holdings

Fees don’t define an ETF. What really matters is how it’s built. Always pop the hood and examine the index methodology and selection rules. That’s where the real story lies.

Right away, there’s a key difference in how these two ETFs approach income. SCHD sports a trailing 12-month yield of 4.02%, while DGRW offers just 1.62%. That’s not a bug; it’s a feature, baked into how each fund is constructed.

SCHD tracks the Dow Jones U.S. Dividend 100 Index. It starts by filtering for stocks with at least 10 consecutive years of dividend payments—not increases, just uninterrupted distributions.

From there, it scores companies based on four factors: free cash flow to total debt, return on equity, dividend yield, and five-year dividend growth rate. The top 100 are selected and market cap weighted, with quarterly rebalancing and annual reconstitution.

DGRW, by contrast, follows the WisdomTree U.S. Quality Dividend Growth Index. It pulls from a larger universe of dividend-paying stocks and selects the top 300 based on forward-looking earnings growth estimates (for growth) and three-year averages of return on equity and return on assets (for quality).

Final weights are based on the company’s projected share of aggregate dividends in the coming year, not yield. That’s a subtle but important difference. It’s also worth clearing up a misconception: DGRW is not a dividend growth ETF in the traditional sense. It’s a growth-oriented ETF that screens for quality within a dividend-paying universe.

Both are concentrated. SCHD’s top 15 names make up 58.94% of assets, while DGRW’s top 15 sit at 46.07%. From a sector perspective, SCHD leans more toward large-cap value stocks—think energy, consumer staples, healthcare, and industrials. DGRW, meanwhile, mirrors the broad market more closely, with a heavier tilt toward tech and growth.

You’ll see it in the holdings: SCHD is top-heavy with names like ConocoPhillips, Coca-Cola, Lockheed Martin, Verizon, and Altria. DGRW features Microsoft, Apple, Exxon Mobil, Procter & Gamble, and even Nvidia.

Verdict: SCHD is a classic large-cap value ETF with a focus on income and financial strength. DGRW is more of a large-cap quality growth fund dressed in dividend clothing. Which one fits better depends on whether you want yield today or capital appreciation tomorrow.

SCHD vs DGRW: Risk and Return

Over the short term, DGRW has outpaced SCHD with stronger 1- and 3-year trailing returns. Despite that, SCHD continues to rake in more investor inflows, likely due to a mix of brand loyalty, higher yield, and perceived simplicity.

In terms of risk, both ETFs have exhibited very similar volatility profiles and comparable max drawdown depth and duration over the same short-term periods. Neither one has shown materially better downside protection in recent corrections.

But when you zoom out to a longer timeframe (2013-05-22 to 2025-05-23), DGRW pulls ahead meaningfully. It has delivered a 12.43% CAGR compared to SCHD’s 10.63%, with superior risk-adjusted returns. DGRW’s Sharpe ratio clocks in at 0.72 versus 0.61 for SCHD, suggesting that investors have been rewarded not just with higher returns, but also more return per unit of risk.

Verdict: Historically, DGRW has been the better total return vehicle with stronger risk-adjusted results. SCHD still shines for yield and cost, but DGRW edges it out for total return-driven investors willing to accept a lower starting yield.

Please note that this article reflects the author’s personal views and does not represent the opinions of the publication or its affiliates. It is for informational purposes only and does not constitute investment advice. It is essential to seek guidance from a registered financial professional before making any investment decisions.