Choosing the Best Dividend ETF: How SCHD and NOBL Stack Up for Income Investors

The Cost Factor That Could Transform Your Returns

When evaluating dividend-focused investments, few metrics matter as much as the expense ratio—and this is where one of these funds significantly outshines the other. The Schwab U.S. Dividend Equity ETF (NYSEMKT:SCHD) charges just 0.06% annually, while the ProShares S&P 500 Dividend Aristocrats ETF (NYSEMKT:NOBL) comes in at 0.35%. On a $100,000 portfolio, that’s $35 per year versus only $6. Over decades, this difference compounds into meaningful wealth preservation.

But cost alone doesn’t tell the whole story. SCHD also delivers a superior current yield of 3.8% compared to NOBL’s 2.2%—more than 70 basis points of additional income annually. For those seeking the best dividend ETF for immediate cash flow, this edge is substantial.

Divergent Strategies: High Yield vs. Dividend Growth

These two funds take fundamentally different approaches to selecting holdings, which explains their performance divergence.

SCHD tracks the Dow Jones U.S. Dividend 100 Index and holds 102 large-cap dividend stocks. Its portfolio tilts heavily toward energy (19.3%), consumer staples (18.5%), and healthcare (16.1%), with top positions including Bristol Myers Squibb (NYSE:BMY), Merck & Co (NYSE:MRK), and ConocoPhillips (NYSE:COP). The fund prioritizes both yield and dividend reliability, making it ideal for income-focused portfolios.

NOBL, by contrast, narrows its focus to just 70 S&P 500 constituents—specifically those that have raised dividends for at least 25 consecutive years (the Dividend Aristocrats criteria). This stricter mandate creates different sector weights: industrials (22.4%), consumer defensive (22%), and financial services (12.4%). Major holdings like Albemarle (NYSE:ALB), Cardinal Health (NYSE:CAH), and C.H. Robinson Worldwide (NASDAQ:CHRW) reflect this bias toward proven dividend growers rather than current high yields.

Performance Under Pressure

Over the five-year period, SCHD delivered $1,298 from a $1,000 investment versus NOBL’s $1,308—a near tie in total returns despite SCHD’s clear yield advantage. The maximum drawdown figures reveal similar downside risk: SCHD experienced a 16.82% peak-to-trough decline compared to NOBL’s 17.91%. This suggests both ETFs behaved similarly during market stress, with the structural differences not creating dramatically different risk profiles.

Over one year (as of December 31, 2025), SCHD returned 4.3% while NOBL achieved 6.8%—a gap worth noting, though both remain below historical long-term equity averages.

Why the Best Dividend ETF Depends on Your Goals

For income maximizers: SCHD’s combination of lower fees and higher yields makes it the standout choice. Its $72.5 billion in assets under management (AUM) versus NOBL’s $11.3 billion also provides greater liquidity and track record depth (14.2 years of operational history).

For dividend growth investors: NOBL’s Dividend Aristocrats focus means you’re not just collecting today’s payouts—you’re investing in companies with proven ability to raise dividends through economic cycles. This appeals to those building long-term wealth through compounding income.

The Bottom Line

Both funds offer legitimate paths to dividend investing without picking individual stocks. SCHD’s low cost structure and superior yield make it the best dividend ETF for those prioritizing current income and fee efficiency. NOBL suits investors who value the track record of consistent dividend increases over maximizing immediate yield. Your choice should ultimately reflect whether you prioritize today’s distributions or tomorrow’s dividend growth.