Schwab’s dividend ETF delivered stronger price gains than 11%-yielding peers by avoiding capped upside from options strategies.
Schwab U.S. Dividend Equity ETF (SCHD) posted a 31% price return over the past year, surpassing the 18% gain for NEOS S&P 500 High Income ETF (SPYI) and 21% for JPMorgan Nasdaq Equity Premium Income ETF (JEPQ). While SPYI and JEPQ offer 11% yields, their covered-call strategies limit upside in rising markets.
SPYI and JEPQ distribute monthly income of roughly $6.31 and $6.52 at prices near $54 and $61, respectively, by selling call options. SCHD, yielding about 3% with quarterly payouts of $1.05 at $34, benefits from dividend growth rather than options premiums.
Investors favoring high yields often overlook the trade-off: covered-call ETFs forfeit potential gains in exchange for steady income, while dividend-focused funds like SCHD capture broader market appreciation.