Industrials have typically performed well in a rising rate environment, and the sector generates large dividends.

Additionally, SCHD includes a 12.2% weight toward the information technology sector, which is beginning to produce big dividend growth.

Over the long-term, research has shown that high-quality stocks typically generate a better risk-adjusted return than riskier stocks.

For more information on dividend stocks, visit our dividend ETFs category.

Max Chen contributed to this article.

Full disclosure: Tom Lydon’s clients own shares of SCHD