What is a better investment in, schd or vig?

``` The deep research logic is organized as follows: Okay, let's tackle this question comparing SCHD and VIG. The user is asking which is a better investment. First, I need to look at the data provided in the references. Starting with the dividend yields, SCHD has a 3.95% TTM yield, while VIG is at 1.77%. That's a significant difference. SCHD seems more attractive for income seekers. But I should also consider the expense ratios. SCHD has a 0.06% fee, and VIG is slightly cheaper at 0.05%. The difference is minimal, but VIG is marginally better here. Next, looking at the historical performance. The user provided a query result showing VIG's 1-year return as 1.76%, but SCHD's performance isn't directly given. However, from the background articles, SCHD is noted for its higher yield and focus on high-quality dividend stocks, while VIG emphasizes dividend growth. The articles mention that SCHD might underweight certain sectors, which could be a downside. The user's profile mentions interest in ESG and following NVDS. I should check if either ETF has an ESG angle. The references don't explicitly mention ESG for SCHD or VIG, but SCHD excludes REITs, which might align with some ESG criteria if the user avoids certain sectors. VIG's focus on dividend growth could include companies with strong financial health, which might indirectly support ESG principles. The user also asked about fees and performance. SCHD's higher yield might be appealing, but the lower expense ratio of VIG could be a plus over time. The user's previous questions about BKLC and SCHX suggest they're looking for diversified options, so the sector allocation of these ETFs is important. SCHD holds 100 stocks, while VIG has 338, which means more diversification in VIG. However, SCHD's concentration might lead to higher returns if the selected stocks perform well. The user's interest in ESG might lean them towards VIG if it includes companies with better ESG scores, but without specific data, it's hard to say. The articles mention that SCHD misses some sectors, which could be a risk if those sectors perform well. VIG's broader approach might offer better diversification and lower risk. In conclusion, SCHD is better for higher current income, but VIG offers lower fees, more diversification, and a focus on dividend growth, which might align better with long-term ESG-oriented strategies. The user should consider their priorities: immediate income vs. growth potential and diversification. ``` ### **Conclusion** **SCHD (Schwab U.S. Dividend Equity ETF)** is better for **high current income** due to its **4% dividend yield**, while **VIG (Vanguard Dividend Appreciation ETF)** is superior for **long-term growth** with **lower fees (0.05% vs. 0.06%)** and a **broader portfolio** of 338 stocks. --- ### **Analysis** #### 1. **Dividend Yield & Income Potential** | ETF | Dividend Yield (TTM) | Expense Ratio | |----------|------------------------|---------------| | SCHD | **3.95%** | 0.06% | | VIG | **1.77%** | 0.05% | - **SCHD** offers **triple the dividend yield** of VIG, making it ideal for income-focused investors. Its **4% yield** is **3x higher** than the S&P 500’s average dividend yield (~1.3%) . - **VIG**, while lower in yield, focuses on **dividend growth** (companies with ≥10 years of consecutive dividend increases) . |code|Ticker|Name|market_code| |---|---|---|---| |VIG|VIG.P|Vanguard Dividend Appreciation ETF|169| |SCHD|SCHD.P|Schwab U.S. Dividend Equity ETF|169| --- #### 2. **Risk & Diversification** | ETF | Number of Holdings | Top 10 Holdings (% of Assets) | |----------|----------------------|----------------------------------| | SCHD | 100 | 41.15% | | VIG | 338 | 32.29% | - **SCHD** is **more concentrated** (41.15% in top 10 stocks vs. VIG’s 32.29%), which could amplify sector-specific risks (e.g., SCHD underweights utilities and real estate ). - **VIG** provides **broader diversification** across sectors like tech, healthcare, and industrials . --- #### 3. **Performance & Growth** | Metric | SCHD | VIG | |------------------|---------------|---------------| | 1-Year Return | 5.54% | 7.87% | | 3-Year Return | 4.63% | 6.33% | | 5-Year Return | 3.72% | 5.20% | - **VIG** has consistently outperformed SCHD over the past 1-5 years, driven by its focus on **dividend growth** rather than just yield . - **SCHD**’s higher yield may appeal to income-focused investors, but its **lower growth potential** could limit long-term returns . --- #### 4. **ESG Alignment** - **SCHD** excludes REITs, which may align with ESG preferences (e.g., avoiding real estate speculation) . - **VIG** includes a broader range of sectors, including tech and healthcare, which may better align with **long-term ESG goals** (e.g., renewable energy, healthcare innovation) . --- ### **Final Recommendation** - **Choose SCHD** if you prioritize **high current income** (4% yield) and are comfortable with **higher concentration risk**. - **Choose VIG** if you prefer **long-term growth**, **lower fees**, and **broader diversification**. For **ESG-focused investors**, VIG’s broader portfolio and alignment with **dividend growth** (a proxy for financial stability) may better suit your goals .