High Dividend Yield Meets High Growth: Why SCHD and NOBL Appeal to Different Investors

When seeking dividend-generating assets, the choice between Schwab U.S. Dividend Equity ETF (SCHD) and ProShares S&P 500 Dividend Aristocrats ETF (NOBL) often comes down to whether investors prioritize immediate income or long-term capital appreciation. Both funds provide a straightforward path into U.S. dividend stocks, yet their distinct construction methodologies and fee structures create notably different value propositions. Here’s what separates these two popular income vehicles and how to determine which aligns with your investment goals.

Cost Advantage and Income Potential: The High Face Value of SCHD

The most striking difference between these funds is their operational expense structure. SCHD charges just 0.06% annually—a mere six cents per $100 invested—while NOBL’s 0.35% fee means investors pay 35 cents on the same amount. Over time, this seemingly small gap compounds significantly, especially for buy-and-hold income investors.

That cost efficiency translates into real dollars and directly contributes to SCHD’s superior dividend yield. Currently yielding 3.8% compared to NOBL’s 2.2%, SCHD delivers higher immediate income to shareholders. This high face value of dividend payments reflects SCHD’s focus on the Dow Jones U.S. Dividend 100 Index, which explicitly targets high-yield securities while maintaining rigorous financial strength standards. The fund tracks 102 large-cap dividend stocks, balancing income generation with stability.

One-year total returns demonstrate the tangible impact of fees and yield: SCHD returned 4.3% versus NOBL’s 6.8%. Yet when examining the broader performance picture over five years, SCHD’s cumulative advantage becomes apparent—$1,000 invested grew to $1,298 in SCHD compared to $1,308 in NOBL, a marginal difference that narrows when fees are factored in.

Portfolio Construction: Different Philosophies for Different Goals

NOBL’s approach centers on the Dividend Aristocrats concept—companies within the S&P 500 that have increased dividends for at least 25 consecutive years. This rigorous selection process results in a 70-stock portfolio weighted toward industrials (22.4%), consumer defensive stocks (22%), and financial services (12.4%). Holdings include Albemarle (ALB), Cardinal Health (CAH), and C.H. Robinson Worldwide (CHRW). The philosophy here prioritizes consistency and capital appreciation potential through dividend growth rather than current yield.

SCHD’s composition tells a different story. With 102 holdings, the fund allocates heavily to energy (19.3%), consumer staples (18.5%), and healthcare (16.1%), featuring positions in Bristol Myers Squibb (BMY), Merck & Co (MRK), and ConocoPhillips (COP). This broader diversification and sector tilt toward income-generating industries creates the higher yield profile. The fund has maintained its approach for 14.2 years, establishing a proven track record of dividend consistency.

Risk profiles show both funds experienced similar drawdown patterns. Over five years, NOBL’s maximum drawdown reached 17.91%, while SCHD’s peaked at 16.82%—suggesting comparable resilience during market stress despite differing construction methods.

Asset Inflows Reflect Investor Preferences

The assets under management tell a compelling story: SCHD manages $72.5 billion compared to NOBL’s $11.3 billion. This six-fold difference underscores which fund structure resonates more with dividend-focused investors. SCHD’s combination of lower fees, higher yields, and strong performance has attracted substantial capital, making it one of the most popular dividend-income vehicles in the ETF universe.

Making the Right Choice

For investors prioritizing current income, SCHD presents the superior option. The high face value of its 3.8% yield, combined with minimal fee drag, creates an efficient income generation machine. The fund’s emphasis on both dividend track record and underlying financial strength means distributions come from fundamentally sound businesses, not financially stressed companies chasing yields.

NOBL caters to a different investor profile—those seeking reliable dividend growth alongside capital appreciation. By restricting holdings to Dividend Aristocrats, the fund emphasizes companies with proven ability to raise distributions year after year. This selectivity provides psychological comfort and suggests lower risk of dividend cuts, even if current yields lag behind SCHD.

Neither fund employs leverage or structural complications; both are straightforward vehicles for dividend exposure. The decision ultimately hinges on your income needs, time horizon, and risk tolerance. Growth-oriented income investors may prefer NOBL’s dividend-raising focus, while yield-focused retirees or income-seekers will likely find SCHD’s combination of high yield and low costs more compelling.

Both funds deserve consideration in a well-rounded portfolio, and for many investors, a combination of both approaches—capturing immediate income from SCHD alongside the stability and growth prospects of dividend aristocrats—may represent the optimal solution.