SCHD: If You’re Considering Selling, Buy QDVO Instead

Dividend investors love their comfort food. In ETF land, that’s Schwab U.S. Dividend Equity (SCHD)—cheap, simple, and built on a quality-tilted dividend index that’s treated countless 401(k)s like a reliable casserole at every potluck since 2011. But if you’ve found yourself side-eyeing SCHD lately—frustrated by its recent lag vs. growth leaders, craving more frequent income, or wanting a fresh approach that still respects quality—there’s a credible pivot: Amplify CWP Growth & Income (QDVO).

No, this isn’t a “dump SCHD forever” manifesto. SCHD remains an excellent core dividend ETF. What follows is a practical, evidence-based case for when it makes sense to rotate some (or all) of an SCHD position into QDVO—and how to do it thoughtfully.

SCHD in one paragraph: why it’s beloved—and why some holders are restless

SCHD tracks the Dow Jones U.S. Dividend 100 Index, cherry-picking 100 U.S. companies with at least 10 years of dividend payments and strong fundamentals (profitability, cash flow, etc.). It’s low cost (0.06% expense ratio), massively liquid, and designed for sustainable dividends rather than mere headline yield. As of October 2025, Schwab lists SEC yield around the mid-3% range and shows a long record of competitive long-term returns with measured risk—classic “sleep-well” exposure for income investors. Schwab Brokerage+1

So what’s the issue? Two things:

Style headwind: In an era where mega-cap growth has dominated, dividend-tilted large-value has simply trailed. Even Schwab’s own performance tables show that SCHD’s 1-year and YTD numbers recently lagged broad growth benchmarks. That’s not a flaw—it’s style exposure doing what style exposure does—but it can feel like treading water while the market’s biggest fish leap ahead. Schwab Brokerage
Payout cadence and level: Quarterly distributions around that 3–4% zone are fine for many, but some investors now want more frequent cash flow and a higher distribution rate—ideally without jumping into junk yield.

If those frictions are why you’re eyeing the exit, QDVO could be the right “sell-into” destination.

Meet QDVO: an active growth-and-income ETF with a covered-call engine

Amplify CWP Growth & Income (QDVO) launched in 2024. It’s actively managed by Capital Wealth Planning (CWP) with a straightforward mandate: capital appreciation first, high current income second, achieved by holding a concentrated basket (roughly 20–40) of large-cap, dividend-oriented growth stocks while tactically writing covered calls (both single-stock and, at times, index overlays). The result aims to be a total-return vehicle that pays monthly. Expense ratio is 0.55%—higher than SCHD, but you’re paying for active selection plus the options overlay. Amplify ETFs

A few details worth underlining from the sponsor:

Portfolio design: Large-cap growth equities with strong earnings and cash-flow traits; CWP tilts sectors tactically. Amplify ETFs
Covered-call strategy: Calls are written tactically on individual names and/or broad indexes to generate option premium and dampen volatility during drawdowns. Amplify ETFs
Monthly distributions: A key differentiator vs. SCHD’s quarterly cadence. Amplify ETFs

Independent profiles (Morningstar, Yahoo Finance, Public.com) broadly echo the sponsor’s positioning—growth & income via a call-writing sleeve on large-cap growth exposure. Morningstar+2Yahoo Finance+2

The crux: why rotate from SCHD into QDVO?

1) You want more frequent and potentially higher cash flow without abandoning quality altogether

Covered-call ETFs exist to convert some future upside into current income. QDVO’s monthly distributions reflect both dividends and option premiums. Note that some monthly payouts include return of capital (ROC)—which can be tax-efficient (defer taxes by lowering cost basis) but is not the same as earned income. For example, Amplify discloses that the 9/30/2025 distribution included an estimated 96% ROC. That’s not “bad”; it’s the nature of option premium accounting and distribution policy, but investors should understand the character of distributions. Amplify ETFs

By contrast, SCHD pays quarterly and largely reflects dividend income from mature, cash-rich companies. If your priority has shifted toward monthly cash flow and smoother income through market cycles, QDVO is tailored for that brief. Schwab Brokerage+1

2) You’re worried the value tilt remains a headwind—and want a growth-aware income approach

SCHD is a rules-based, quality dividend index fund anchored in large-value. It’s terrific when value works and still solid long-term, but it won’t morph into growth leadership just because the market zeitgeist does. QDVO, however, centers on large-cap growth (think “quality growth with dividends”) and then adds a call-writing sleeve to monetize volatility into income. If your fear is “I’m missing the upside leadership while collecting a modest yield,” QDVO tries to straddle growth participation and cash flow. Schwab Brokerage+1

3) You want active security selection and tactical sector tilts

SCHD is passive by design—its edge is discipline and cost. QDVO leans into active: a smaller roster of high-conviction names with the flexibility to tilt exposures and adjust the call overlay. If you believe manager discretion can add value (especially around covered-call placement, strike selection, and timing), that argues for QDVO. Amplify ETFs

Weighing the trade-offs honestly

No strategy upgrade comes free. Here’s the straight talk.

Expense ratio: 0.55% for QDVO vs. 0.06% for SCHD. That’s a meaningful delta. You’re paying for active stock selection and the operational complexity of options. Make sure the after-fee outcome matches your goals. Schwab Brokerage+1
Upside participation is capped when calls are on: Covered calls exchange some future upside for income today. In runaway bull legs, QDVO may lag a pure equity sleeve. That’s by design. If the market melts up, SCHD (and especially uncapped growth funds) could outpace QDVO. Amplify ETFs
Distribution composition: Expect ROC in many months. It’s often tax-efficient, but it’s not the same as purely earned income. Keep records for cost basis, and prepare for variability month to month. Amplify ETFs
Concentration: SCHD owns ~100 names (cap-weighted within index constraints). QDVO targets 20–40. Higher concentration raises idiosyncratic risk, though the covered calls can partially offset volatility. Schwab Brokerage+1
Track record: SCHD’s decade-plus history vs. QDVO’s 2024 launch. While CWP is an experienced income manager, QDVO itself is newer—so you’re accepting manager and process risk with less back history. Schwab Brokerage+1

If those trade-offs read like a fair price for what you want (monthly checks, growth tilt, tactical income), the rotation case is strong.

The taxonomy of your decision: who should consider switching?

Consider rotating from SCHD to QDVO if at least two of these are true:

Cash-flow cadence matters: You prefer monthly income (budgeting, bill matching, or simply psychological comfort).
You’re style-sensitive: You worry value will keep lagging secular growth leadership and want an income plan that leans growth.
You accept capped upside: You’re fine sacrificing a slice of rallies for steadier cash flow.
You value active options management: You believe expertise in writing calls can enhance risk-adjusted returns and smooth drawdowns.
You understand ROC: You’re comfortable with distribution character varying and potentially being tax-efficient ROC.

If those don’t resonate—and you prize the lowest fee, index purity, quarterly income, and long track record—keeping SCHD (or pairing it with a separate growth sleeve) may suit you better. Schwab Brokerage

Head-to-head: SCHD vs. QDVO (what actually differs)

Feature	SCHD	QDVO
Approach	Passive, tracks Dow Jones U.S. Dividend 100	Active stock selection + tactical covered calls
Style bias	Quality dividend / large-value	Dividend-oriented large-cap growth
Holdings	~100 names	~20–40 names
Expense ratio	0.06%	0.55%
Distribution	Quarterly, primarily dividend income	Monthly, dividends + option premium; often ROC
Upside/downside	Full upside; no option income	Capped upside when calls are on; premium income supports downside
Track record	Inception 2011	Inception 2024
Use case	Core dividend anchor	Growth-aware income with tactical cash flow

Sources: Schwab product page; Amplify product page and prospectus; Morningstar/Yahoo/Public profiles. Public+5Schwab Brokerage+5Amplify ETFs+5

Performance context: what to expect (and not expect)

When markets grind or chop: Covered-call funds tend to shine—option premium subsidizes returns when price progress is slow or sideways. Expect QDVO to feel smoother than owning only growth stocks. Amplify ETFs
When markets rip higher: Calls can get assigned. QDVO may trail a growth index or even a dividend fund with more cyclical beta. That’s the cost of income today. Amplify ETFs
When markets drop: Premiums don’t eliminate drawdowns, but they can soften the blow; SCHD’s quality/value tilt also helps defensively, but lacks the explicit premium engine. Schwab Brokerage+1

Remember, SCHD’s own multi-year numbers remain solid; a recent period of underperformance relative to growth leadership doesn’t nullify the long-term case. It just says style cycles matter, and your personal objective might be better served by a growth-aware income overlay right now. Schwab Brokerage

Taxes: dividends vs. option premium vs. ROC

SCHD: Distributions are primarily qualified dividends (company dividends that typically get favorable tax treatment), paid quarterly. Simple and familiar. Schwab Brokerage
QDVO: Monthly distributions may comprise dividends, option premium (often taxed as short-term gains), and ROC. ROC can be tax-efficient (defer taxes by reducing your cost basis), but it complicates your records. Amplify posts Form 19a-1 notices detailing each month’s breakdown—read them. If you’re in a taxable account and like minimizing current taxes, ROC can be helpful; just note the basis adjustments. Amplify ETFs

As always, individual tax situations vary—talk to a tax pro.

Implementation: how to rotate intelligently

Step 1: Define the goal.
Are you seeking more income, different style exposure, or volatility control? QDVO helps with all three, but prioritize your “why.”

Step 2: Decide on a partial vs. full rotation.

Partial (50–75%): Keep a SCHD core for ultra-low cost and index discipline, but add QDVO to create monthly cash flow and a growth tilt.
Full: If your primary need is monthly income from a growth-aware portfolio and you’re comfortable with upside caps, a full swap is defensible.

Step 3: Phase it in.
Because QDVO tactically writes calls, consider dollar-cost averaging over a few months to avoid unlucky timing around big rallies or ex-dates.

Step 4: Reinvest or spend?
If you don’t need the income now, DRIP to compound. If you do, align QDVO’s monthly cash flow with your actual bills.

Step 5: Monitor two things

Distribution composition (watch those 19a-1 notices for ROC), and
Call coverage posture (sponsor commentary/updates) to know how capped your upside might be at any moment. Amplify ETFs

A sample blueprint

Case A: Income upgrader who still likes quality

Current: 100% SCHD
Target: 60% SCHD / 40% QDVO
Rationale: Keep the ultra-low-fee quality dividend anchor while adding monthly cash flow and a growth-aware sleeve.

Case B: Growth-aware retiree matching expenses

Current: 70% SCHD / 30% broad market
Target: 0–30% SCHD / 70–100% QDVO (depending on appetite for capped upside)
Rationale: Use QDVO’s monthly payouts to match recurring expenses; retain a SCHD minority if you want quarterly dividend “seasonality” and index robustness.

Case C: Taxable investor harvesting ROC

Current: 100% SCHD
Target: 50% SCHD / 50% QDVO
Rationale: Blend qualified dividends with potentially tax-efficient ROC, minding basis adjustments.

Objections, answered

“Why not just keep SCHD and add a growth fund?”
You could. Pairing SCHD with a growth ETF is a classic barbell. The difference is cash-flow engineering: QDVO’s covered calls monetize volatility into monthly income. If your top priority is predictable cash flow, QDVO consolidates that function without you having to manage a separate options overlay. Amplify ETFs

“Fees are higher—won’t that drag?”
Higher fees are a headwind only if the strategy doesn’t deliver what you need. If QDVO’s option income and active selection provide either steadier cash flow, better behavior in chop, or more tolerable volatility that keeps you invested, the net outcome can be superior for your objectives. Amplify ETFs

“Aren’t ROC distributions ‘fake yield’?”
ROC isn’t “fake”—it’s a tax classification. The economic yield includes option premium harvested from the market; the tax character of some payouts shows as ROC. That can be beneficial in taxable accounts (deferral) but requires awareness. Amplify is transparent about this in monthly notices. Amplify ETFs

“Covered calls underperform in raging bull markets.”
True. When markets sprint, call-writing strategies usually trail uncapped beta. If you want maximum upside, stick with uncapped funds. If you want consistent income and lower effective volatility, covered calls are a fair trade. Amplify ETFs

What the neutral sources say (quick scan)

Schwab emphasizes SCHD’s quality dividend methodology, long history, very low fee, and consistent process—plus current SEC yield ~3.8% and distribution yield in the mid-3s as of recent data. This is exactly what SCHD holders sign up for. Schwab Brokerage
Amplify frames QDVO as growth-and-income with active calls, monthly distributions, and tactical sector tilts; it explicitly discloses distribution composition (including ROC when applicable). Amplify ETFs
Independent profiles (Morningstar, Yahoo Finance, Public.com) characterize QDVO as a large-cap growth exposure with a covered-call overlay targeting consistent income—useful context for due diligence. Morningstar+2Yahoo Finance+2

A balanced bottom line

If you’re happy with a very low-fee, quality dividend index fund that pays quarterly, and you accept value/growth cycles for what they are, SCHD remains a top-tier core holding. Full stop. Schwab Brokerage

But if you’re considering selling because:

you want monthly cash flow,
you prefer a growth-aware approach to income, and
you’re comfortable exchanging some upside for option premium today,

then buying QDVO instead (or alongside) makes a lot of sense. It’s purpose-built for investors who want their portfolio to pay them steadily while maintaining exposure to leading growth franchises, with an active manager deciding when and how to write calls. Amplify ETFs

For many, the most sensible move isn’t a hard switch but a blend: keep SCHD as your ultra-efficient quality dividend pillar and add QDVO as your cash-flow accelerator. That pairing addresses the most common pain points (income cadence and growth participation) without abandoning the virtues that made SCHD popular in the first place.

Due-diligence checklist before you trade

Read the fund pages and the latest prospectus/summary to confirm mandate, risks, and fees. Schwab Brokerage+1
Scan the most recent distribution notices for QDVO to understand ROC patterns. Amplify ETFs
Model your taxes (taxable account vs. IRA; dividend rates vs. ROC).
Decide on phasing (e.g., three tranches over a quarter).
Set expectations: QDVO won’t win every tape; it’s designed to pay you through different tapes.

If that’s the outcome you want next, the case to rotate is compelling.

Sources

Schwab Asset Management — SCHD fund page: objective, fee (0.06%), yields, performance and fund stats. Accessed Oct. 3, 2025. Schwab Brokerage
S&P Dow Jones Indices — Dow Jones U.S. Dividend 100 Index methodology overview. S&P Global
Amplify ETFs — QDVO fund page: objective, strategy, expense ratio (0.55%), monthly distributions, ROC disclosures, methodology. Accessed Oct. 3, 2025. Amplify ETFs
Amplify ETFs — QDVO Prospectus (Jan. 28, 2025). Amplify ETFs
Morningstar/Yahoo Finance/Public.com/QDVO — independent profiles reinforcing strategy description and positioning. Morningstar+2Yahoo Finance+2
ETFdb — SCHD overview, holdings, and expense ratio. ETF Database

Note to readers: This article is for educational purposes and is not personalized investment advice. Always consider your objectives, risk tolerance, and tax situation before making changes.