SCHD Is Brilliant. Here's Why I Think This Dividend ETF Is Even Better.
2026-09-26 09:20
•Matt Dilallo •The Motley Fool
••• •••••• Axe Cap view
Dividend ETFs: Income vs Growth, With a Local View
US dividend ETFs SCHD and RDVY highlight a classic trade-off between steady income and capital growth — with clear signals for South African investors.
The Schwab U.S. Dividend Equity ETF (SCHD) and First Trust Rising Dividend Achievers ETF (RDVY) offer two distinct styles in dividend investing. SCHD focuses on large, established dividend payers like Coca-Cola and PepsiCo, delivering a dependable 3% yield and solid income potential. RDVY leans into faster-growing Nasdaq dividend stocks with lower current yields but higher total returns over the past decade. South African investors can’t buy these funds directly, but the USD/ZAR pair offers a practical proxy. A stronger dollar erodes dividend income in rand terms, so those hunting yield on the JSE might prefer companies like Standard Bank or Sasol, which offer steady dividends. For growth, Prosus and Naspers have more tech exposure but come with more volatility. If the rand unexpectedly strengthens or US inflation cools sharply, the advantage in income and yield sensitivity could flip. this is just our opinion and not financial advice
For reliable income, tilt toward high-dividend JSE stocks like Standard Bank or Sasol while keeping an eye on rand strength. Use USD/ZAR to hedge any US dividend exposure and watch tech-heavy growth via Naspers selectively.
- USD/ZAR
- Standard Bank
- Sasol
- Naspers
- rand volatility
- US inflation surprises
- South African economic slowdown
7/10
The article compares two dividend-focused ETFs: SCHD (Schwab U.S. Dividend Equity ETF) and RDVY (First Trust Rising Dividend Achievers ETF). While SCHD offers high current dividend yield (3%) with slower-growing, established companies, RDVY has delivered superior 10-year average annual returns (15.8% vs 13.2%) by focusing on faster-growing Nasdaq-listed companies with rising dividends. The choice between them depends on investment goals: SCHD for income, RDVY for wealth growth.
Our take is based on reporting first published by The Motley Fool.