SCHD vs VYM vs DGRO vs VIG vs JEPI: The Best Dividend ETFs, Compared
Four of these screen for dividends. One of them isn't really a dividend fund at all — and it's the one with the 8% yield.
By Pavel Penev, MScFounder, TradeWize · 10+ years trading the marketsSearch for the best dividend ETF and you will be handed a list sorted by yield, which is roughly as useful as ranking cars by top speed. The five funds people actually argue about — SCHD, VYM, DGRO, VIG and JEPI — are not five versions of the same product. Four of them screen a US stock index for dividends and differ mainly in how. The fifth mostly earns its income by selling options, which is a completely different machine wearing the same badge. Here is what each one holds, what it costs, and the single fork that decides which suits you.
The short answer
SCHD pays the most of the four real dividend index funds (3.33%) and is the most concentrated, at 103 stocks. VYM is the cheapest and broadest — 0.04% across 605 stocks — and yields 2.25%. DGRO and VIG deliberately pay less today (1.98% and 1.52%) because they screen for companies that keep raising, not companies that pay a lot now. JEPI's 8.45% is not a dividend yield in the ordinary sense: it comes largely from writing call options, it costs 0.35%, and it belongs in a different mental box entirely.
The five, side by side
| Fund | Fee | 30-day SEC yield | Holdings | What it screens for |
|---|---|---|---|---|
| SCHD | 0.06% | 3.33% | 103 | High yield + financial-ratio quality tests |
| VYM | 0.04% | 2.25% | 605 | Above-average forecast yield, very broadly |
| DGRO | 0.08% | 1.98% | 390 | A record of growing the dividend |
| VIG | 0.04% | 1.52% | 332 | A longer record of growing the dividend |
| JEPI | 0.35% | 8.45% | — | Not a screen — active stocks + written S&P 500 calls |
Figures taken from each issuer's own fund page in July 2026 and linked at the end. Yields move constantly — the ranking between these funds is far more durable than the numbers themselves.
Two things in that table are worth pausing on, because both cut against what the internet will tell you. The first is that VYM and VIG now charge 0.04%, not the 0.06% you will still see quoted almost everywhere — Vanguard cut fees across 84 share classes in 53 funds, these two included. VYM is now cheaper than SCHD. The second is the holdings column: SCHD holds 103 stocks and VYM holds 605. These are both described as broad US dividend funds. One of them owns six times as many companies as the other.
Plot yield against fee and the shape of the decision appears immediately. Four cluster in the cheap, modest corner and differ by fractions. JEPI is somewhere else entirely — nine times the fee, and a yield produced by a different mechanism.
Same market, three different sieves
Every one of the first four funds starts from roughly the same universe of US companies and then applies a filter. The filter is the fund. VYM asks a single question — is the forecast yield above average? — and takes everyone who passes, which is why it ends up holding 605 companies. SCHD asks that question and then several more about balance-sheet strength and consistency, and finishes with 103. DGRO and VIG ignore today's yield almost entirely and ask instead who has a record of raising the payout, which selects for a different sort of company: often lower-yielding, often better quality, frequently the same megacaps you already own in an S&P 500 fund.
Holdings counts are the tell. A fund that keeps 103 of the field is making a much stronger claim than one that keeps 605 — and a fund screening for raises rather than payouts is answering a different question altogether.
The fork: income now, or income that grows
Strip everything else away and this is the decision. SCHD hands you 3.33% today. VIG hands you 1.52% today. If VIG's companies raise their dividends faster — which is precisely what its screen selects for — then at some point its annual payment overtakes SCHD's, and after that it keeps pulling away. The question is not which pays more. It is which pays more over the period you actually intend to hold it, and whether you need the income now or in twenty years.
That crossover point is extremely sensitive to a number nobody knows: the future growth rate. Rather than assert one, set it yourself and watch where the lines meet.
$10,000 invested once. One fund pays more today; the other raises faster. Set both and find the year the lines cross — if they ever do.
Starting yields are the real 30-day SEC yields sourced at the end of this article. The growth rates are your assumption, not a forecast — no one knows what any fund will raise its dividend by, and past growth does not carry forward. Dividends can be cut. This models income only, ignores tax and share-price changes, and is not a recommendation.
The uncomfortable part
For an investor with decades ahead and no need for the cash, the honest answer is often that neither is the priority. A dividend is not free money — a company paying $1 is worth $1 less afterwards, which is why the share price adjusts on the ex-dividend date. In a taxable account a dividend is income you are taxed on whether you wanted it or not, while an unsold share is not. Dividend investing is a preference for a particular kind of return, not a superior one. If you are 28 and reinvesting everything anyway, a plain total-market fund does much the same job with less machinery.
SCHD: the strict one
SCHD tracks the Dow Jones U.S. Dividend 100 Index, and the 100 in that name is the whole personality. It screens for companies that pay well and then applies quality tests based on financial ratios, keeping around 103 of them. That produces the highest yield of the four real dividend funds at 3.33%, with a fee of 0.06% and roughly $103bn in assets, which makes it the one most people mean when they say dividend ETF.
The case against it is the same as the case for it: 103 stocks is a genuine bet. It leans value, it is light on technology by construction, and there will be stretches — the last several years included — where that costs you against a plain index fund. That is not a flaw, it is the trade you are making, but it should be a trade you make on purpose.
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Try the free lesson →VYM: the cheap, broad, boring one
VYM tracks the FTSE High Dividend Yield Index and takes essentially everyone above average, ending up with 605 stocks at 0.04%. It yields less than SCHD — 2.25% — because it does not concentrate into the biggest payers, and it behaves much more like the market with a value tilt than like a distinct strategy. For someone who wants a dividend flavour without a real bet against the index, VYM is the least opinionated way to get it, and it is now the cheapest fund in this comparison.
DGRO and VIG: the ones playing a longer game
These two are close cousins and are frequently mixed up. DGRO tracks the Morningstar US Dividend Growth Index, holds around 390 stocks, yields 1.98% and costs 0.08%. VIG tracks the S&P U.S. Dividend Growers Index, holds 332, yields 1.52% and costs 0.04%. Both screen for a record of increases rather than a high payout, which is why both yield less than the others on this page and why both look, in a holdings list, more like a quality-tilted total-market fund than an income product.
Choosing between them is close to a coin toss and not worth agonising over: VIG is stricter and cheaper, DGRO is slightly broader and yields a little more. The larger decision was made a step earlier, when you chose growth over yield at all.
JEPI: the one that is not really a dividend fund
JEPI's headline is an 8.45% yield, and it draws enormous attention for the obvious reason. It deserves attention for a less obvious one: that number is not produced the way the others are. JEPI runs an actively managed defensive equity portfolio and writes out-of-the-money call options on the S&P 500, and the monthly distribution is largely the premium collected from selling those options rather than dividends paid by companies. It is categorised as derivative income, not as an equity income index fund, and it costs 0.35% — nine times VYM.
Selling a call caps your upside on the move it covers, in exchange for cash today. That is a real, coherent strategy with a real cost: in a strong rising market you keep the premium and give up part of the rally, so total return tends to lag a plain equity fund even while the income looks spectacular. None of that makes JEPI bad. It makes it a different instrument, one whose distribution is not a dividend and whose 8.45% cannot be compared like-for-like with SCHD's 3.33%. If you compare only the yield column, JEPI wins every table it is in, which is exactly the problem with yield columns.
The overlap nobody mentions
One practical warning before you buy two of these. Because DGRO and VIG select on dividend growth, their largest positions are frequently the same enormous, profitable US companies that dominate an S&P 500 fund — the JPMorgans, Microsofts and Broadcoms of the index. If you already hold a total-market or S&P 500 fund and you add a dividend-growth ETF beside it, a meaningful share of what you have bought is a second helping of what you already owned, at a slightly higher fee. Holding SCHD alongside an index fund is a genuinely different bet, because 103 quality-screened value-leaning names diverge much further from the index. Check what you already own before adding, rather than after.
So which one?
- You want the largest dividend cheque now and accept a real value tilt — SCHD, at the price of holding only 103 stocks.
- You want a dividend flavour without betting against the index — VYM, the cheapest and broadest of the five.
- You are decades from needing the income and want the payment to grow into it — DGRO or VIG, knowing you are paid less for years first.
- You specifically want monthly cash and understand you are buying an options strategy, not a dividend — JEPI, with the fee and the capped upside priced in.
- You are young, reinvesting everything, and investing in a taxable account — consider whether you want a dividend fund at all rather than a plain total-market one.
Is SCHD or VYM better?
They answer different questions. SCHD yields more (3.33% vs 2.25%) because it concentrates into 103 quality-screened high payers, which is a genuine bet against the broad index. VYM holds 605 stocks at 0.04% and behaves much more like the market with a value tilt. SCHD if you want the income and accept the bet; VYM if you want the flavour without the concentration, and the lower fee.
Why does JEPI yield 8% when the others yield 2-3%?
Because it is not doing the same thing. JEPI writes out-of-the-money call options on the S&P 500 and distributes the premium it collects, so most of that 8.45% is options income rather than dividends paid by companies. Selling calls caps your upside in exchange for cash now, which means total return tends to lag a plain equity fund in strong markets even while the distribution looks large. It costs 0.35%, against 0.04% for VYM.
Can I just hold both a dividend ETF and an S&P 500 fund?
You can, but check the overlap first. Dividend-growth funds like DGRO and VIG select for large, profitable, reliably-raising companies, which are frequently the same megacaps that already dominate an S&P 500 fund — so you may be buying a second serving of what you own at a higher fee. SCHD overlaps less because its quality-and-value screen produces a genuinely different 103 stocks.
Do dividend ETFs beat the market?
Not reliably, and that is not really their purpose. A dividend fund is a tilt toward a particular type of company — value, quality, or dividend growth depending on the screen — and tilts take turns being right. Over the last decade the tilt has generally lagged a plain total-market fund because it is structurally light on the technology companies that led. Buy one because you want its income profile, not because you expect it to outperform.
Are dividends taxed differently from selling shares?
In a taxable account a dividend is taxable in the year it is paid, whether you wanted the cash or not, while a share you simply hold is not taxed until you sell it. That means the ordinary tax treatment of an equivalent return can differ, and it is one reason high-yield funds are often better held inside a tax-sheltered account. Rules vary considerably by country, so check yours.
What is a 30-day SEC yield, and why not use the dividend yield?
It is an annual rate, which is the part that trips people up. The SEC prescribes the formula in Item 26 of Form N-1A: take the fund's income over the most recent 30 days, net of expenses, and annualise it — so SCHD's 3.33% is what it pays over a year, not over a month. You can see the annualising at work by putting it beside the trailing-twelve-month distribution yield of 3.30%; if the SEC figure were a plain 30-day return it would be roughly a twelfth of that. Because the formula is standardised, it is comparable between funds from different issuers. A trailing dividend yield looks backwards over twelve months and can be flattered by a one-off payment. When comparing funds, the SEC yield is the more honest column — it is what we have used throughout this page.
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