There are four ETF investments I often recommend. But they don’t share equal characteristics. Each one has a history of growing dividends, but they are not the same even in that regard. The four are VYM, SCHD, DVY and DGRO. I own large positions in VYM and SCHD. My grandchildren own shares of DVY, DGRO and VYM.
One easy way to compare them is to use a Weiss Ratings tool. The tool let’s you pick stocks or ETFs to compare side-by-side. Using that tool, I can compare: 1) Performance; 2) Dividends and Assets; 3) Total assets (balance sheet); 4) Expense Ratios and 5) Turnover ratios. In previous posts I have talked about most of these, but I believe all five are very important considerations for comparison, for selection and for rejection of investments. VYM, SCHD, DVY and DGRO all meet my criteria, but in different ways.
The performance over five years would put DGRO on top. But DVY has the best current dividend yield. But is the expense ratio eating into the yield? DVY has a higher expense ratio, the highest of the three. VYM and SCHD have the most investor-friendly expense ratios. For turnover, I think VYM is a better choice for less churn of the stocks in the fund. None of these is terrible, so to increase diversification, using two or more of these four can be a good long-term strategy. VYM has 405 holdings, SCHD has 100, DVY has 100 and DGRO has 476. It is likely that VYM and DGRO hold many of the same investments, but all four are large cap value ETFs. An argument could be made that DGRO is the best choice.
For those who like mutual funds and want to understand how ETF’s differ, this is a helpful summary:https://www.fidelity.com/viewpoints/investing-ideas/mutual-fund-or-etf