SPYD and SCHD: 2 High-Yield Dividend ETFs to Buy with $100 and Hold for Long-Term Value

SPDR Portfolio S&P 500 High Dividend ETF (NYSEMKT: SPYD) and Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD)—stand out as highly effective and affordable investment choices. With just $100, investors can initiate positions in both funds and benefit from a blend of high yield and dividend growth for the long term.

SPDR Portfolio S&P 500 High Dividend ETF (SPYD): High Yield from Large-Cap Stocks

The SPDR Portfolio S&P 500 High Dividend ETF (SPYD) offers exposure to 80 of the highest-yielding companies in the S&P 500 index, equally weighted to ensure no single stock dominates performance. This fund is primarily tailored to investors seeking maximum dividend income from large, well-established U.S. companies.

SPYD Strategy and Structure:

• Index Tracked: S&P 500 High Dividend Index

• Selection Criteria: Top 80 dividend-yielding stocks from the S&P 500

• Weighting Method: Equal weighting across all holdings

• Dividend Yield: Approximately 4.5%

• Share Price: Trades under $50/share, enabling small-ticket entry

By focusing exclusively on the highest-yielding S&P 500 constituents, SPYD provides substantial income potential but tends to overweight sectors such as utilities, energy, financials, and real estate, which are traditionally dividend-heavy. While these sectors may be cyclical or under pressure during certain economic periods, SPYD captures value opportunities and out-of-favor blue chips that often revert to mean performance.

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Schwab U.S. Dividend Equity ETF (SCHD): Quality Dividend Growth at Reasonable Yield

On the other hand, the Schwab U.S. Dividend Equity ETF (SCHD) takes a more quality-focused, growth-oriented approach to dividend investing. It screens companies based on consistent dividend increases over 10+ years and integrates financial health metrics to curate a fundamentally strong portfolio.

SCHD Strategy and Structure:

• Index Tracked: Dow Jones U.S. Dividend 100 Index

• Selection Criteria: 10-year dividend growth, strong financial ratios (ROE, cash flow/debt)

• Weighting Method: Market-cap weighted (larger companies have more influence)

• Dividend Yield: Approximately 4.0%

• Share Price: Trades just above $25/share

SCHD targets financially robust firms with a proven ability to grow dividends, often avoiding deep-value or distressed sectors. It excludes REITs and leans into industrials, consumer staples, and technology when appropriate. This makes it less cyclical and more stable over market cycles, while still delivering a competitive yield.

Why Both SPYD and SCHD Work Better Together

Though either fund can stand alone as a strong dividend income generator, combining SPYD and SCHD creates a diversified, complementary strategy for the long haul:

Benefits of Holding Both:

• SPYD offers high current income by targeting undervalued, yield-rich sectors, especially utilities, REITs, and cyclical large caps.

• SCHD provides quality, growth-oriented exposure, favoring financially sound, dividend-growing blue chips.

• The blend results in a more balanced sector allocation, reducing overexposure to any one industry.

• Different weighting styles (equal vs. market-cap) ensure performance is not dominated by mega-cap stocks alone.

• Both ETFs maintain low expense ratios and trade liquidly on U.S. exchanges.

Together, SPYD and SCHD offer a core dividend income portfolio that is diversified, consistent, and optimized for both high current yield and long-term dividend growth. Investors can begin building this portfolio with as little as $100, especially when using fractional share investing platforms.

Dividend ETF Snapshot

These ETFs align well for investors seeking steady income, manageable volatility, and passive growth through reinvested dividends, all within a low-cost, tax-efficient wrapper. Whether you’re starting your investment journey or adding to an existing income strategy, SPYD and SCHD are reliable, long-term dividend vehicles worth holding indefinitely.

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