🤝 BFF Take
Same Cost, Different Dividend Philosophy — Know What You're Buying
SCHD and VYM charge the same 0.06% expense ratio, so this decision is entirely about income strategy. SCHD tracks the Dow Jones US Dividend 100 Index, which screens for dividend consistency, financial health, and yield — selecting just 100 high-quality dividend payers. VYM tracks the FTSE High Dividend Yield Index, casting a broader net across 558 stocks that simply have above-average dividend yields. SCHD has historically delivered stronger total returns and dividend growth because its quality screen filters out financially weaker companies with unsustainably high yields. VYM's larger, more diversified portfolio provides stability but has trailed SCHD on both income growth and capital appreciation. For most long-term income investors, SCHD's focus on dividend quality edges out VYM's yield-chasing approach.
📋 Quick Takeaways
💰Equal cost — both charge 0.06%/yr (~$6/yr per $10K). This is a strategy decision, not a cost decision.
🔀SCHD: 100 quality-screened dividend growers; VYM: 558 high-yield stocks — very different portfolios
🎯SCHD for dividend growth and total return; VYM for broader diversification with a yield tilt
📊 Data-Based Take: SCHD has the lower fee
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
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Reviewed by a CFA® Charterholder · Data updated Jun 2026 · Educational only, not financial advice
SCHD
Schwab US Dividend Equity ETF
VYM
Vanguard High Dividend Yield ETF
📋 SCHD vs VYM — Key Facts Side by Side
| Metric |
SCHD |
VYM |
| Fund Name |
Schwab US Dividend Equity ETF |
Vanguard High Dividend Yield ETF |
| Issuer |
Schwab |
Vanguard |
| Tracks Index |
Dow Jones US Dividend 100 |
FTSE High Dividend Yield |
| Expense Ratio |
0.06% |
0.06% |
| Cost per $10K/yr |
$6.00 |
$6.00 |
| AUM |
$65B |
$56B |
| Holdings |
100 |
558 |
| Inception |
2011 |
2006 |
| 1-Year Return |
+10.50% |
+11.20% |
| 3-Year Return |
+7.20% |
+7.80% |
| 5-Year Return |
+11.80% |
+10.90% |
| Avg Bid-Ask Spread |
0.00% |
0.00% |
Data from ETF BFF database. Returns are annualised. Not investment advice.
📊 SCHD vs VYM — Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Should You Buy SCHD or VYM?
Choose if...
SCHD
- You want regular dividend income from quality dividend payers
- You already use Schwab and prefer staying within their fund family
Choose if...
VYM
- You want broader diversification (558 holdings vs 100)
- You want regular dividend income from quality dividend payers
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❓ SCHD vs VYM — Frequently Asked Questions
What is the difference between SCHD and VYM?
Both SCHD and VYM are US dividend ETFs with a 0.06% expense ratio, but they use different strategies. SCHD tracks the Dow Jones US Dividend 100 Index, which applies strict quality screens — selecting only 100 companies with strong dividend history, financial ratios, and consistent payouts. VYM tracks the FTSE High Dividend Yield Index across 558 stocks, focusing primarily on current yield with less emphasis on quality filtering. SCHD tends to have stronger dividend growth; VYM has broader diversification.
Which dividend ETF pays more — SCHD or VYM?
VYM typically offers a slightly higher current dividend yield (often 3.0–3.5%) compared to SCHD (around 3.3–3.7% depending on the period), but the gap is small. More importantly, SCHD has historically grown its dividends at a faster rate year over year — meaning SCHD investors tend to receive larger dividend increases over time. If you're building a long-term income stream, SCHD's dividend growth rate may outweigh VYM's slightly higher starting yield.
Is SCHD better than VYM for retirement income?
For most retirement income strategies, SCHD is a slightly stronger choice due to its track record of dividend growth and better total return history. Dividend growth matters in retirement because it helps your income keep pace with inflation. That said, VYM's broader 558-stock portfolio means individual stock concentration risk is lower. Both are solid choices — many investors hold both for complementary exposure.
How do SCHD and VYM perform in market downturns?
Both SCHD and VYM tend to hold up better than growth-oriented funds during downturns due to their dividend-paying, financially stable holdings. VYM's heavier weighting toward defensive sectors (consumer staples, utilities, healthcare) can provide slightly more cushion in severe crashes. SCHD's quality screens also filter out companies that may cut dividends during stress, which historically has meant fewer dividend cuts in SCHD's portfolio during recessions.
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ℹ️ Data shown is for educational purposes and may not reflect the most current figures. Returns are trailing price-based and exclude dividend reinvestment. Past performance does not guarantee future results. ETF BFF is not a licensed financial advisor — this is not personalized financial advice.