SCHD vs VYM
Schwab Dividend Equity (SCHD) vs Vanguard High Dividend Yield (VYM) — Quality dividends or high yield?
Understanding SCHD and VYM
SCHD (Schwab US Dividend Equity ETF) focuses on dividend quality over raw yield. It screens for companies with at least 10 consecutive years of dividends, strong fundamentals, and consistent dividend growth. This results in a concentrated portfolio of approximately 100 high-quality dividend payers.
VYM (Vanguard High Dividend Yield ETF) casts a wider net, tracking approximately 550 stocks with above-average dividend yields. It's less focused on dividend quality and more on capturing a broad swath of dividend-paying companies across sectors.
The dividend investor's dilemma: Quality focus (SCHD) or broad diversification (VYM)? SCHD typically offers a higher yield (3.30% vs 2.26%) and has outperformed historically, but VYM provides more sector diversification with a lower expense ratio.
Head to Head
The classic dividend ETF showdown: SCHD's quality-focused approach (~100 holdings) vs VYM's broad diversification (~550 holdings). Compare dividend yields, expense ratios, returns, and risk metrics to find the right fit for your income portfolio.
| Metric | SCHD | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 0.06% | 0.04% | VYM |
| Total Assets | $85.9B | $92.3B | VYM |
| Dividend Yield | 3.30% | 2.26% | SCHD |
| Number of Holdings | ~100 | ~550 | VYM |
| 1 Year Return | +13.48% | +17.33% | VYM |
| 5 Year Return | +50.14% | +69.09% | VYM |
| 10 Year Return | +219.40% | +190.31% | SCHD |
| Volatility (3Y) | 13.5% | 11.6% | VYM |
| Max Drawdown | -21.5% | -51.8% | SCHD |
Growth of $10,000
What if you had invested $10,000 in each ETF? For income investors, this chart includes price appreciation only—dividends would add significantly to total returns. SCHD's quality screen has historically delivered stronger price growth, but VYM's broader diversification provides stability.
Monthly Returns Comparison
The heatmaps below show month-by-month returns for both dividend ETFs. Green indicates positive months, red indicates negative. Dividend stocks tend to be less volatile than growth stocks—notice the generally muted colors compared to tech-heavy ETFs.
SCHD Monthly Returns
VYM Monthly Returns
Key Differences
SCHD (Quality Dividend)
- • Focuses on dividend quality & growth
- • ~100 holdings with strict quality filters
- • Higher dividend yield (typically)
- • Screens for 10+ year dividend history
- • More concentrated, quality-focused
VYM (High Yield)
- • Tracks high-yield dividend stocks
- • ~550 holdings for diversification
- • Lower expense ratio
- • More sector diversification
- • Broader market exposure
The Bottom Line
Choose SCHD if you prioritize dividend quality, growth, and are comfortable with higher concentration. Choose VYM if you prefer broader diversification and a lower expense ratio. Both are excellent choices for dividend investors — many hold both for different accounts.
Frequently Asked Questions
What is the difference between SCHD and VYM?
SCHD focuses on quality dividend stocks with strict screening criteria (about 100 holdings), while VYM tracks a broader universe of high-dividend stocks (about 550 holdings). SCHD emphasizes dividend growth and quality; VYM prioritizes diversification.
Which has a higher dividend yield: SCHD or VYM?
SCHD typically has a higher dividend yield (3.30%) compared to VYM (2.26%). SCHD's quality focus tends to include companies with stronger dividend payouts.
Should I invest in both SCHD and VYM?
Some investors hold both — SCHD for quality and dividend growth, VYM for broader diversification. However, there's significant overlap. If choosing one, consider your priority: quality focus (SCHD) or diversification (VYM).
What is the expense ratio for SCHD vs VYM?
VYM has a lower expense ratio (0.04%) compared to SCHD (0.06%). Both are considered low-cost ETFs, but VYM has a slight edge on fees.
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Last updated: 3/15/2026