Quick Read
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Schwab US Dividend Equity (SCHD) gained only 0.73% in 2025 due to zero tech sector exposure.
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Vanguard Dividend Appreciation (VIG) returned 13.22% in 2025 with 27.80% allocation to technology.
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JPMorgan Equity Premium Income (JEPI) offers an 8.21% yield through monthly dividends and covered call strategies.
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If you’re thinking about retiring or know someone who is, there are three quick questions causing many Americans to realize they can retire earlier than expected. take 5 minutes to learn more here
Dividend exchange-traded funds (ETFs) have gained traction in 2025. It has helped investors navigate the market uncertainties while ensuring steady passive income. The Schwab US Dividend Equity ETF (NYSEARCA:SCHD) is one of the most popular ETFs today. It is a top choice of many due to the dividend yield of 3.83% and has ensured steady returns. However, SCHD isn’t as successful as it used to be.
There are many dividend ETFs that have outperformed SCHD, which means it is time to look beyond it and consider other alternatives. The ETF has only gained 0.73% in 2025, mainly because it doesn’t have exposure to the tech sector and has missed out on the ongoing rally. Here’s why it is worth looking at Vanguard Dividend Appreciation Index Fund ETF (NYSE: VIG), Vanguard High Dividend ETF (NYSE:VYM), and JPMorgan Equity Premium Income ETF (NYSEARCA:JEPI) instead of SCHD.
Vanguard Dividend Appreciation Index Fund ETF
The Vanguard Dividend Appreciation Index Fund ETF is worth consideration for income investors. This ETF has a yield of 1.57% and has gained 13.22% in 2025. While its yield is lower than SCHD’s, it has shown significant capital appreciation. The fund has an expense ratio of 0.05% and is exchanging hands for $220.66.
VIG has generated a cumulative 3-year return of 48.47% and a 5-year return of 76.50%. With regard to total returns, SCHD generated 54% over the past five years, while VIG generated 70.6%. VIG holds 338 stocks and has the highest allocation in the technology sector at 27.80%, followed by financials at 21.40% and healthcare at 16.70%. It has $101.8 billion in assets under management and holds more stocks than SCHD.
The fund invests in top dividend-paying stocks such as Broadcom, Eli Lilly, Johnson & Johnson, Walmart, and Visa Inc. These companies have rewarded investors for years and have the potential to keep doing so. VIG’s criteria is that the companies must have raised dividends for more than a decade straight. Hence, the companies are financially stable and come with competitive advantages.
Choosing VIG over SCHD may give you a lower dividend each quarter, but you get to see both income and capital appreciation. Since the fund has a high allocation in the technology sector, it gets to make the most of the tech rally. If you’re looking for an ETF that can withstand the test of time, VIG could be an ideal choice.
Vanguard High Dividend Yield Index Fund ETF
Another Vanguard fund, the Vanguard High Dividend Yield Index Fund ETF, enjoys a yield of 2.39% and has gained 12.38% in 2025. It is exchanging hands for $143.33 and is considered a great choice for income investors. The passively managed fund tracks the FTSE High Dividend Yield Index. It has $84.6 billion in assets under management.
The fund invests in over 500 stocks and has an expense ratio of 0.06%. VYM invests in companies that pay higher-than-average dividends, and it aims to generate steady income over time. Since it invests in companies that pay a high dividend, you get to own stable, established businesses that generate steady cash flow.
It has generated a cumulative 3-year return of 40.51% and a 5-year return of 89.08%. The fund has the highest allocation in the financial sector (21%), followed by technology (14.30%) and industrials (12.90%). Similar to VIG, the fund holds top dividend stocks such as Johnson & Johnson, Walmart, Cisco Systems, Home Depot, Broadcom, and Bank of America. Since it invests in over 500 stocks, the exposure to a single company is limited, reducing the risk.
VYM has an annualized return of 12% over the past three years and an annualized return of 11.28% over the past decade. The majority of its funds lie in large-cap and high-value stocks, offering ultimate diversification at low cost. While it has a lower yield than SCHD, its total return is higher, making it a better choice.
JPMorgan Equity Premium Income ETF
Managed by the experts at JP Morgan, the JPMorgan Equity Premium Income ETF is a dividend ETF that pays monthly. The fund has an attractive yield of 8.21% and has a defensive equity portfolio that aims to ensure steady monthly income.
JEPI holds 124 stocks and has the highest allocation in the technology sector (15.5%), followed by healthcare (12.3%) and financials (11.6%). Its top 10 holdings include companies with robust financials and a history of rewarding investors with dividends. These include Johnson & Johnson, AbbVie, Visa Inc., and Mastercard. Additionally, it also holds tech stalwarts such as Apple Inc., Microsoft Corporation, and Alphabet Inc.
The ETF has a two-part strategy. It builds a portfolio of low-volatility, defensive stocks that can hold up better than the broader market, and as the second step, it sells out-of-the-money call options on the S&P 500 index. It uses Equity Linked Notes that mimic the returns of selling the call options. With JEPI, you enjoy a high yield, but the capital appreciation remains limited. However, the monthly dividend can make up for it. As compared to SCHD’s yield of 3.83%, JEPI has more than double the yield.
JEPI is one of the most widely known ETFs in the market for a reason, and it has done well in the past few years due to the market rally. The fund has generated a 3-year cumulative return of 30.89% and a 5-year cumulative return of 60.32%. It is exchanging hands for $57.54 and has remained flat this year.
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