The Setup: A Top-Heavy Index and a Popular Fix
The S&P 500 is more top-heavy than it has been in a long time. On State Street's November 9 holdings file, SPY's ten biggest stocks make up 38.9% of the fund (counting Alphabet's two share classes as one holding). Seven megacaps alone (Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta and Tesla) add up to 33.2%.
A popular argument among income investors online this fall goes like this: own dividend stocks and you diversify away from that concentration. Then came November 5, when tech sold off hard and QQQ fell 6.5% in a single day.
That leaves a practical question for anyone holding a dividend ETF: how much of the same bet is already inside yours? We went through five of the most widely held dividend ETFs, holding by holding, to find out.
Related reading: we've already looked at concentration inside the broad index funds in SCHD, VOO, VTI, SPY: How Much of Your Index Fund Is Really One Big Tech Bet, and at how often the same big tech names show up in different funds in Three Funds, Same Big Tech Stocks: VOO, QQQM and VGT. This piece covers only the dividend side.
Step 1: Look Through the Fund, Not at Its Label
Two definitions. "Magnificent 7" means AAPL, MSFT, NVDA, AMZN, GOOGL plus GOOG, META and TSLA. "Overlap with SPY" works like this: for each stock, take whichever is smaller, the fund's weight or SPY's weight, then add those up across all stocks. The result is the share of the fund that is the same bet as owning SPY.
Holdings come from each issuer's own full holdings file: SCHD (Schwab, 11/10/2026), DGRO (iShares, 11/10), DGRW (WisdomTree, 11/10), SPY (State Street, 11/9) and RSP (Invesco, 11/10). VYM uses Vanguard's 9/30/2026 month-end file, the latest Vanguard publishes. FDVV's 92 stock holdings come from EODHD holdings data as of the 11/10 close. Alphabet's two share classes (GOOGL and GOOG) are counted together as one holding throughout, including in the top-10 weights. Tech sector weights use Morningstar's classification.
Performance and yield figures are historical and may change. Total return includes price movement and distributions where available. Past performance does not guarantee future results. Yield is not the same as total return.
| Fund | Holdings | Mag 7 weight | Mag 7 + Broadcom | Top 10 weight | Overlap with SPY | Tech sector |
| SPY | 503 | 33.2% | 35.6% | 38.9% | 100% | 35.0% |
| DGRW | 196 | 26.1% | 28.1% | 39.8% | 50.3% | 32.6% |
| FDVV | 92 | 21.5% | 24.0% | 34.8% | 39.1% | 28.8% |
| DGRO | 389 | 6.2% | 8.6% | 26.8% | 43.8% | 17.9% |
| VYM | 590 | 0% | 6.9% | 26.2% | 35.2% | 18.3% |
| SCHD | 102 | 0% | 0% | 41.3% | 8.5% | 15.7% |
| RSP (equal-weight S&P, reference) | 506 | 1.4% | 1.5% | 2.8% | 44.3% | 16.8% |
These are strategy profiles, not recommendations. Suitability depends on individual objectives, risk tolerance, tax situation, time horizon, and broader portfolio construction.
What Each Fund Holds
- DGRW: its top four holdings are MSFT 8.0%, NVDA 6.6%, AAPL 4.6% and Alphabet 3.6% (GOOGL and GOOG combined, 1.8% each). It also holds META at 3.3% and Broadcom at 2.0%. About half the fund overlaps SPY.
- FDVV: AAPL 7.1%, NVDA 6.5%, MSFT 5.7%, AVGO 2.4%, Alphabet 1.5% and META 0.8%, plus DELL at 2.2%. FDVV also holds some non-US stocks, which SPY doesn't own, so they lower its overlap figure.
- DGRO: MSFT 3.1%, AAPL 3.1% and AVGO 2.4%. It holds no NVDA, AMZN, Alphabet, META or TSLA.
- VYM: no Magnificent 7 names at all, but its largest holding is Broadcom at 6.9% (as of the 9/30 file).
- SCHD: no Magnificent 7 stocks and no Broadcom. Its top 10 are TXN 4.6%, PG 4.4%, HD 4.3%, KO 4.3%, AMGN 4.1%, PEP 4.0%, QCOM 4.0%, UNH 3.9%, ABT 3.9% and CVX 3.9%.
One detail stands out. SCHD's top 10 make up 41.3% of the fund, which is more concentrated than SPY's top 10. It's concentrated in different companies. Low overlap with SPY and low concentration are two separate measures.
Also, "no Mag 7" doesn't mean "no tech." Two of SCHD's ten largest holdings, Texas Instruments and Qualcomm, are chipmakers, and the fund is 15.7% technology by Morningstar's classification. We covered that shift in SCHD's Two Biggest Holdings Are Now Chipmakers.
