Choosing Between SCHD and NOBL: Which High Yield ETF Fits Your Income Strategy?

Why These Two ETFs Matter for Dividend Investors

For investors seeking regular dividend income without the hassle of picking individual stocks, dividend-focused ETFs offer a compelling solution. Schwab U.S. Dividend Equity ETF (NYSEMKT:SCHD) and ProShares S&P 500 Dividend Aristocrats ETF (NYSEMKT:NOBL) stand out as two of the most popular choices, but they serve distinctly different investment philosophies. Understanding their core differences can help you select the right fit for your portfolio.

The Cost Advantage: Why Fees Matter More Than You Think

One of the most striking differences between these two options involves their operational costs. SCHD operates with a lean 0.06% expense ratio, while NOBL charges 0.35% annually. On a $100,000 investment, that translates to $60 versus $350 in yearly fees—a significant gap that compounds over decades.

This cost difference becomes even more meaningful when you examine the dividend yield these funds generate. SCHD currently delivers a 3.8% dividend yield, making it an attractive high yield etf option for income-focused portfolios. NOBL trails at 2.2%, a 160 basis point gap that directly impacts your annual cash returns. Over time, SCHD’s lower fees combined with its superior yield have contributed to its outperformance, with $1,000 invested growing to $1,308 in NOBL versus $1,298 in SCHD over five years, though these similar growth rates mask the income story.

Under the Hood: Portfolio Construction and Sector Exposure

The two funds employ fundamentally different stock selection methodologies that shape their holdings and performance profiles.

SCHD tracks 102 large-cap dividend-paying U.S. stocks, concentrating heavily in three sectors: energy (19.3%), consumer staples (18.5%), and healthcare (16.1%). This diversification across 102 positions creates a broader exposure to dividend-paying companies. Top holdings include Bristol Myers Squibb (NYSE:BMY), Merck & Co (NYSE:MRK), and ConocoPhillips (NYSE:COP). The fund follows the Dow Jones U.S. Dividend 100 Index, emphasizing high-yield stocks alongside strong financial fundamentals and dividend track records.

NOBL takes a more selective approach, holding just 70 stocks from the S&P 500 that meet a stringent criterion: at least 25 consecutive years of dividend increases. This “Dividend Aristocrats” requirement tilts the portfolio toward industrials (22.4%), consumer defensive (22%), and financials (12.4%). Key positions include Albemarle (NYSE:ALB), Cardinal Health (NYSE:CAH), and C.H. Robinson Worldwide (NASDAQ:CHRW). By design, NOBL prioritizes dividend growth trajectory over current yield, betting that companies disciplined enough to raise payouts annually will continue doing so.

Performance and Risk: The Comparable Stability

Both funds weathered market turbulence similarly. Over five years, SCHD experienced a maximum drawdown of 16.82%, slightly better than NOBL’s 17.91%. In terms of total returns over the past year (as of December 31, 2025), SCHD delivered 4.3% while NOBL returned 6.8%, though this comparison reflects a shorter timeframe and doesn’t necessarily predict longer-term results.

The funds’ structural differences—SCHD’s broader exposure to 102 stocks versus NOBL’s refined 70-stock aristocrat list—create different risk profiles. Neither fund employs leverage or exotic structures, maintaining straightforward implementations that appeal to income investors.

Asset Size and Market Presence

SCHD commands significantly more capital, with $72.5 billion in assets under management compared to NOBL’s $11.3 billion. This scale provides liquidity advantages and suggests broad institutional and retail adoption of SCHD’s higher-yield, lower-cost approach.

Determining the Right Choice for Your Situation

Choose SCHD if you prioritize current income and cost efficiency. The 3.8% dividend yield positions it as a genuine high yield etf alternative, while the 0.06% expense ratio ensures minimal drag on returns. If you’re in or near retirement and need regular cash flow, SCHD’s income generation capacity makes it particularly attractive. Its 14.2-year track record demonstrates consistent execution of its income-focused mandate.

Choose NOBL if you believe in the power of compounding dividend growth. The Dividend Aristocrats criterion filters for companies with proven commitment to returning cash to shareholders through consistent increases. If you’re a younger investor willing to accept lower current yield in exchange for the prospect of rising payments over time, NOBL’s disciplined selection offers that narrative. The psychological comfort of owning companies that have increased dividends for a quarter century shouldn’t be underestimated.

The Bottom Line

Both SCHD and NOBL represent solid vehicles for dividend-focused investing, but the 29 basis point expense ratio gap and 160 basis point yield difference create materially different outcomes over time. SCHD’s lower costs and higher current income have historically driven superior returns, making it the choice for pure income generation. NOBL appeals to investors who view rising dividends as evidence of financial health and sustainable payout capacity.

Your decision ultimately depends on whether you seek maximum current income or prefer betting on dividend growers. Most income investors find themselves drawn to SCHD’s efficiency, but NOBL’s aristocratic credentials retain value for those who want the assurance that comes with a 25-year dividend increase track record.