AMZY vs. SCHD: Explosive Monthly Cash or Dividend Growth Machine?

It’s an age-old question in the world of exchange traded funds (ETFs): Should you go for the highest yield, or is it better to play it safe with a “slow-and-steady” fund? That’s the big question of 2025’s second half as today we’re comparing two remarkable ETFs, the YieldMax AMZN Option Income Strategy ETF (NYSEARCA:AMZY) and the Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD).

One of these funds attempts to squeeze massive monthly income from Amazon (NASDAQ:AMZN) stock while the other ETF extracts a respectable yield from a wide array of large-cap dividend growers. The common theme is passive income opportunities, but the strategies and risk levels are quite different.

However, we will look for a compromise that unlocks AMZY’s explosive monthly cash and SCHD’s quarterly dividend growth machine. Then, you’ll be equipped to leverage the benefits of these two terrific ETFs.

AMZY: Monthly Cash, Amazon Stock Exposure

It’s understandable if you’re a fan of Amazon stock as this company is a giant in the fields of e-commerce and cloud computing. On the other hand, passive income investors may feel overlooked because Amazon doesn’t pay any dividends at all.

The YieldMax AMZN Option Income Strategy ETF can solve this problem by putting sizable cash payments into your account. This fund doesn’t directly invest in Amazon stock shares, but it does provide indirect exposure (to a limited extent, as we’ll discuss soon) to the share-price movements of AMZN stock.

Here’s a simplified breakdown of how this ETF works. First of all, the YieldMax AMZN Option Income Strategy ETF holds some U.S. Treasury bonds, which can serve as collateral for the fund while also generating income.

Along with that, AMZY uses synthetic option strategies to imitate ownership of Amazon stock shares. That’s how the YieldMax AMZN Option Income Strategy ETF achieves indirect exposure to AMZN stock.

In addition, the AMZY ETF uses covered call writing/selling strategies to generate income from the replicated ownership of Amazon stock. Amazingly, these strategies enable the YieldMax AMZN Option Income Strategy ETF to feature a 47.29% annual distribution rate, paid out on a monthly basis.

Know the Limitations of AMZY

It’s fine if you don’t understand every single aspect of AMZY’s option trading strategies, as long as you know the fund’s limitations. First, there’s no guarantee that the 47.29% annual yield of the YieldMax AMZN Option Income Strategy ETF will continue in the future.

If the Amazon stock price declines sharply, the AMZY ETF may end up reducing its distribution rate and the fund’s share price could fall. That scenario would be a double-whammy for investors who bought too many shares of the YieldMax AMZN Option Income Strategy ETF.

Furthermore, the YieldMax AMZN Option Income Strategy ETF deducts annual operating expenses totaling 1.17% of the share price. On top of all that, the AMZY ETF’s covered call trading strategy limits the fund’s share-price upside potential.

When Amazon stock goes up sharply, owners of the YieldMax AMZN Option Income Strategy ETF may be disappointed because the fund’s share price only rises by a limited amount. This helps to account for AMZY’s not-so-great long-term price performance.

SCHD: Decent Yield From Dividend Growth Stocks

In contrast to the eye-popping distribution rate of the YieldMax AMZN Option Income Strategy ETF, the Schwab U.S. Dividend Equity ETF advertises a more moderate yield and it’s not paid monthly. Nevertheless, what SCHD has to offer is definitely respectable and there are important benefits to this fund.

Specifically, the Schwab U.S. Dividend Equity ETF features a trailing 12-month distribution yield of 3.97%, and the fund’s cash payments are made on a quarterly basis. The SCHD ETF tracks the Dow Jones U.S. Dividend 100 Index, and its holdings include a basket of 103 stocks.

There’s a sense of safety and stability that comes with the Schwab U.S. Dividend Equity ETF. That’s because its holdings are widely diversified across multiple sectors of the economy, and because the companies represented in the SCHD ETF are well-known dividend growers.

Think about it: if a company can afford to increase its dividend payments on a regular basis, that’s a sign of a financially solid business. Thus, within the Schwab U.S. Dividend Equity ETF’s full holdings list you’ll find dividend-growth superstars like Home Depot (NYSE:HD), Coca-Cola (NYSE:KO), Chevron (NYSE:CVX), and Lockheed Martin (NYSE:LMT).

Other dividend-growing standouts in the SCHD ETF include Bristol-Myers Squibb (NYSE:BMY), Verizon Communications (NYSE:VZ), and Conoco Philips (NYSE:COP). These are industry leaders that aren’t afraid to reward their loyal shareholders with dividends that build over time.

Minimal Fees and Relative Price Stability

With the Schwab U.S. Dividend Equity ETF, you don’t have to worry about high management fees taking a big chunk out of your profits. Prospective investors should be glad to know that the SCHD ETF’s expense ratio (i.e., the annualized operational fees) only amount to 0.06% of the share price.

The best feature of all, though, might be the relative share-price stability of the Schwab U.S. Dividend Equity ETF. Granted, you won’t get monthly cash distributions or enormous annual yield.

However, the breadth of diversification tends to reduce volatility and keep the SCHD share price on a steady long-term uptrend. So, instead of aiming for gigantic cash payouts, you can prioritize relative safety and rock-bottom fees with the Schwab U.S. Dividend Equity ETF.

Winning With a Balanced Approach

When all is said and done, you can get monthly distributions from the YieldMax AMZN Option Income Strategy ETF as well as price stability with the Schwab U.S. Dividend Equity ETF. You can achieve this by owning shares of both funds.

Yet, it’s important to de-risk your portfolio by only keeping a few shares of AMZY. As for SCHD, you could hold a medium-sized position since it’s less risky.

This is a balanced approach for investors who want to maximize their passive income without being overly aggressive. The back half of 2025 could be a yield harvester’s dream, so feel free to give the YieldMax AMZN Option Income Strategy ETF and the Schwab U.S. Dividend Equity ETF a try.

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