Schwab U.S. Dividend Equity ETF and Vanguard High Yield Dividend ETF were highlighted as defensive income plays as rising stock valuations revive correction fears.
Markets have surged since April 1, pushing the Shiller P/E ratio near historic highs and keeping volatility elevated after two years of sharp swings in the VIX index.
SCHD has gained about 18% this year and yields 3.22% on a 30-day basis, with dividend reinvestment lifting its 12-month return to 29% from 24%.
VYM, which holds about 608 stocks, is up roughly 11% year to date and offers a 2.25% 30-day yield, giving investors broader large-cap dividend exposure.
Both funds were presented as portfolio diversifiers because they pair above-average income with long-term returns that can cushion drawdowns in volatile markets.
As the AI supercycle soars, are dividend ETFs a safe harbor or a ticket to missing historic gains?
Can a new quant portfolio's back-tested success truly predict future outperformance against established ETFs like VYM?