3 Monthly Dividend ETFs Outperforming SCHD

Amplify CWP Enhanced Dividend Income (DIVO) distinguishes itself through an actively managed approach that combines dividend-paying stocks with a covered call strategy to boost income generation. Over the past decade, DIVO has delivered a robust 12.5% annualized return, slightly edging out SCHD’s 12.2% performance. This superior performance stems from its dual focus on high-quality, dividend-growing companies combined with option income, which provides additional cushion against market volatility.

The ETF’s sector allocation reflects a balanced approach to growth and stability. While technology represents 16.9% of the portfolio, benefiting from the artificial intelligence boom, financials at 28.8% and industrials at 16.5% provide necessary diversification. DIVO’s top three holdings—Caterpillar (CAT), Apple (AAPL), and Visa (V)—represent established companies with strong dividend histories. The fund’s five-year performance further solidifies its competitive position, with a 13.4% return significantly outpacing SCHD’s 12.0% over the same period.

WisdomTree U.S. Total Dividend (DTD) takes a comprehensive approach to dividend investing by targeting a wide range of dividend-paying U.S. stocks across all market capitalizations. Its 10-year annualized return of 12.4% closely rivals SCHD’s performance, reflecting the strength of its diversified exposure to stable, dividend-focused companies. The ETF’s methodology weights stocks by their total dividend payments, favoring firms with consistent cash flows and reliable payout histories.

DTD’s sector allocation shows significant exposure to financial stocks at nearly 21% of the portfolio, while technology represents 16.1% and healthcare comprises over 11%. This balanced sector approach helps mitigate concentration risk while maintaining growth potential. The fund’s top holdings include Microsoft (MSFT), JPMorgan Chase (JPM), and Nvidia (NVDA)—companies known for their strong financial positions and dividend consistency. DTD’s five-year performance is particularly impressive, delivering a 15.1% return that surpasses SCHD, making it an attractive option for investors prioritizing both income and capital appreciation.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) tracks the iconic Dow Jones Industrial Average, offering concentrated exposure to 30 blue-chip U.S. companies. With a 10-year annualized return of 13.3%, DIA easily outperforms SCHD, driven by its focus on industry leaders with strong fundamentals and consistent dividend policies. This performance demonstrates that a concentrated portfolio of established companies can deliver superior long-term results while maintaining income stability.

DIA’s sector composition reflects the industrial backbone of the U.S. economy, with financials comprising 27% of the total portfolio, technology at 20.5%, industrials at 14%, and consumer discretionary stocks at nearly 13%. The fund’s largest holding is Goldman Sachs (GS) at over 10% of its assets, with Microsoft and Caterpillar following closely at just over 6% each. DIA’s five-year return of 12.8% also outpaces SCHD’s 12.0%, showing resilience despite its concentrated holdings. The monthly dividends derived from these stalwart companies appeal to investors seeking a balance of growth and income with a proven track record.

Each of these monthly dividend ETFs offers distinct strategic advantages that contribute to their superior performance compared to SCHD. DIVO’s active management and options strategy enhance returns, particularly in volatile markets, while providing monthly income that can be reinvested more frequently than SCHD’s quarterly distributions. DTD’s broad dividend focus across market capitalizations provides superior diversification, reducing sector-specific risks while maintaining competitive returns. DIA’s blue-chip exposure ensures stability and consistent growth, appealing to conservative investors who prefer established companies with proven track records.

However, investors must consider the unique risks associated with each approach. DIVO’s active management and options strategy may introduce higher volatility in certain market conditions, though the covered call component typically provides some downside protection. DTD’s broad exposure, while reducing sector risk, may lag in strongly growth-driven markets where more concentrated strategies excel. DIA’s focus on only 30 large-cap stocks limits diversification compared to broader market ETFs but benefits from the inherent stability of blue-chip firms with strong balance sheets and consistent dividend histories.

The combination of monthly dividend distributions and strong long-term returns makes these three ETFs compelling alternatives to SCHD for income-focused investors. Their consistent outperformance over both 10-year and 5-year periods, coupled with more frequent income streams, provides multiple advantages for retirement planning, income generation, and portfolio compounding. Investors should weigh these factors against their specific financial goals, risk tolerance, and income needs when considering these monthly dividend ETF options.