Dividend investing is evolving. While SCHD has long been the go-to choice for steady income and defensive stability, 2025 introduces a new contender: FDVV, which captures growth and dividends from today’s tech and innovation leaders. This newsletter examines the trade-offs between reliability and forward-looking potential, helping you determine whether to stick with the old guard, embrace the new frontier, or blend both strategies for a more informed portfolio.

Let’s embark on this transformative journey together and position your portfolio for success in this evolving market landscape!

Be sure to read through to the end to catch all the valuable insights this newsletter delivers to your inbox today.

There’s a shift happening in dividend investing that almost no one saw coming. For years, investors turned to dividend funds like SCHD as the safe, dependable cornerstone of their portfolios. It made sense: low costs, a defensive tilt, predictable payouts. The kind of ETF you bought, held, and rarely worried about.

But in 2025, that expectation has been flipped upside down. The Fidelity High Dividend ETF, ticker $FDVV ( ▼ 0.45% ) , is leading the pack — not by a slim margin, but by double digits. While $SCHD ( ▼ 0.18% ) has slipped into negative territory at –1.16% year-to-date, FDVV is up an impressive 11.17%. That’s more than a 12% performance gap in less than a year.

Numbers like that can’t be brushed aside. They force a hard question: is dividend investing really about sticking with the “tried and true,” or is it about recognizing where dividend growth is actually happening in today’s economy?

SCHD, the Schwab U.S. Dividend Equity ETF, has been the benchmark for defensive dividend investing since 2011. With $71.4 billion in assets under management, an expense ratio of just 0.06%, and a yield of 3.83%, SCHD has become the default choice for investors looking for steady income without drama.

Its strategy is straightforward: track the Dow Jones U.S. Dividend 100 Index, which only includes companies with at least ten years of consecutive dividend payments. In other words, SCHD rewards longevity and consistency. That means its holdings read like a roll call of established American businesses: Chevron (4.39%), Cisco (4.33%), PepsiCo (4.28%), ConocoPhillips (4.25%), and Altria (4.21%).

SCHD’s sector allocations underscore its defensive nature:

These are the industries that have carried dividend portfolios for decades. They’re reliable, recession-resistant, and yield-focused. But here’s the problem: what worked in the past isn’t necessarily what wins in the present. Energy, SCHD’s largest bet, is under pressure as renewables and electric vehicles reshape the landscape.

FDVV, Fidelity’s High Dividend ETF, launched in 2016 with a very different lens. Instead of rewarding companies simply for paying dividends for decades, FDVV looks ahead. It tracks the Fidelity High Dividend Index, where weighting comes from:

This forward-looking methodology has tilted FDVV toward the very companies that are driving today’s economy. Its top holdings include Nvidia (6.68%), Microsoft (5.92%), Apple (4.8%), Broadcom (2.74%), and JP Morgan (2.7%).

Notice the difference? Instead of leaning on the past century’s dividend stalwarts, FDVV is betting that today’s tech giants and modern innovators will be tomorrow’s dividend aristocrats. Its sector exposure says it all:

And so far, this bet has paid off. Over the past three years, FDVV has delivered 16.3% annualized returns, more than doubling SCHD’s 7.4%. Over five years, FDVV’s 18.1% annualized again crushes SCHD’s 11.72%.

It’s tempting to say FDVV is the obvious winner, but dividend investing is never that simple. The right choice depends on what you need from your portfolio.

And then there are fees. SCHD’s 0.06% expense ratio is nearly three times cheaper than FDVV’s 0.16%. Over decades, that difference compounds into tens of thousands of dollars.

What this really comes down to is your investment personality and priorities.

The truth? A balanced portfolio might hold both. SCHD provides the foundation of reliable, recession-resistant income, while FDVV injects the growth potential of tomorrow’s dividend aristocrats. Together, they create a blend of tradition and innovation.

But one fact is clear: 2025 marks a turning point in dividend investing. The market is telling us that dividends no longer belong exclusively to yesterday’s giants. Technology companies and growth leaders are stepping into the arena, and they’re doing more than just keeping pace — they’re dominating.

So the question for you is simple:
Do you stick with the comfort of the old guard, or lean into the future where growth and dividends converge?

The choice reflects more than just a fund preference. It reflects your view of where the economy is going — and how you want your wealth to grow alongside it.

Ready to Revolutionize Your Wealth?

Here's what's waiting for you:

Being outspent doesn't mean being outmarketed. Our latest resource showcases 15 small businesses that leveraged creativity instead of cash to achieve remarkable marketing wins against much larger competitors.

Ready to level the playing field? Download now to discover the exact frameworks these brands used to compete and win.

Download now for free here.

With the world becoming increasingly digital, this question will be on the minds of millions of people looking for new income streams in 2025.

The answer is—Absolutely!

Thank you for taking the time to read today’s email! Your support is what allows me to send out this newsletter for free every day. 

 What do you think of the new format? Please provide your feedback in the poll below, and if you find the newsletter valuable, feel free to share it with other investors!

Disclaimer: This newsletter is for informational purposes only and should not be considered financial advice. Please consult with a financial advisor before making any investment decisions.