DIA vs SCHD: 2 ETFs Enter, 1 ETF Leaves
LAST UPDATED: April 23, 2023 | By Conrad Golly
Have you ever wondered what the difference is between DIA and SCHD? Well, I did, and I decided to do some research to find out. After all, I want to make sure I’m investing my money wisely. And let me tell you, the results were quite interesting.
First off, let’s talk about expenses. DIA vs SCHD:
As we all know, fees can eat away at our returns over time. And when it comes to DIA and SCHD, there’s a notable difference in their expense ratios. According to my research, DIA’s expense ratio is 0.10 percentage points higher than SCHD’s (0.16% vs. 0.06%). That might not sound like a lot, but it can add up over time.
Another difference between these two funds is their exposure to the financial services sector. DIA has a lower exposure to this sector compared to SCHD.
Additionally, DIA has a higher standard deviation, which means it has a higher level of volatility. So, if you’re looking for a more stable investment, SCHD might be the better choice.
What is DIA vs SCHD?
Well, let me tell you a bit about these two funds. DIA stands for the SPDR Dow Jones Industrial Average ETF, which tracks the Dow Jones Industrial Average (DJIA).
The DJIA is made up of 30 large-cap stocks that are leaders in their respective industries. So, when you invest in DIA, you’re essentially investing in the top 30 companies in the US.
SCHD, on the other hand, stands for the Schwab US Dividend Equity ETF. This fund tracks the Dow Jones US Dividend 100 Index, which is made up of 100 high dividend yielding US stocks. So, if you’re looking for a bit more income from your investments, SCHD might be the way to go.
Now, let’s talk about some of the key differences between these two funds. One of the biggest differences is the expense ratio. DIA has an expense ratio of 0.16%, while SCHD’s expense ratio is only 0.06%. That might not sound like a big difference, but over time, those fees can really add up.
Another difference is the sector exposure. DIA has a higher exposure to the financial services sector, while SCHD has a higher exposure to the consumer staples sector. Depending on your investment goals, one of these might be more appealing to you than the other.
Finally, it’s worth noting that DIA has a higher standard deviation than SCHD. Standard deviation is a measure of volatility, so this means that DIA is generally more volatile than SCHD. If you’re looking for a more stable investment, SCHD might be a better choice.
Differences Between DIA and SCHD
| Metric | DIA | SCHD |
|---|---|---|
| Expense Ratio | 0.16% | 0.06% |
| Holdings | Tracks Dow Jones Industrial Average consisting of 30 large-cap US stocks | Tracks Dow Jones U.S. Dividend 100 Index consisting of 100 high dividend yielding US stocks |
| Exposure | Higher exposure to financial services sector | Higher exposure to consumer staples and healthcare sectors |
| Performance | Outperformed by SCHD over the past 8 years | Provided higher returns compared to DIA over the past 8 years |
| Volatility | More volatile compared to SCHD | – |
Expense Ratio DIA vs SCHD
When it comes to expense ratio, DIA and SCHD have a noticeable difference. DIA has an expense ratio of 0.16% while SCHD has an expense ratio of 0.06%. This means that SCHD is cheaper to invest in compared to DIA.
Holdings DIA vs SCHD
Another difference between DIA and SCHD is their holdings. DIA tracks the Dow Jones Industrial Average, which consists of 30 large-cap US stocks. On the other hand, SCHD tracks the Dow Jones U.S. Dividend 100 Index, which consists of 100 high dividend yielding US stocks.
Due to their different holdings, DIA has a higher exposure to the financial services sector compared to SCHD. Additionally, SCHD has a higher exposure to the consumer staples and healthcare sectors compared to DIA.
Performance DIA vs SCHD
When it comes to performance, SCHD has outperformed DIA over the past 8 years. According to the source article, SCHD has provided higher returns compared to DIA. However, it’s important to note that past performance doesn’t guarantee future results.
Furthermore, DIA has a higher standard deviation compared to SCHD. This means that DIA is more volatile compared to SCHD.
In summary, the main differences between DIA and SCHD are their expense ratio, holdings, and performance. SCHD is cheaper to invest in, has a higher exposure to consumer staples and healthcare sectors, and has outperformed DIA over the past 8 years.
However, DIA has a higher exposure to the financial services sector and is more volatile compared to SCHD.
Which One Should You Choose?
So, now that we have compared DIA and SCHD, which one should you choose? Well, it depends on your investment goals and risk tolerance. Let’s take a closer look.
Investment Goals DIA vs SCHD
If your investment goal is to track the performance of the Dow Jones Industrial Average, then DIA is the way to go. However, if you want exposure to high dividend-paying stocks, then SCHD might be a better fit for you.
Additionally, if you’re looking for a fund with a lower expense ratio, then SCHD is the clear winner. On the other hand, if you’re comfortable with a higher expense ratio and want a larger fund, then DIA might be the better choice.
Risk Tolerance DIA vs SCHD
When it comes to risk tolerance, DIA and SCHD have different levels of risk. DIA has a higher standard deviation, which means it has more volatility and risk. On the other hand, SCHD has a lower standard deviation, which means it has less volatility and risk.
So, if you have a higher risk tolerance and are comfortable with more volatility, then DIA might be the better choice. But, if you have a lower risk tolerance and want a more stable investment, then SCHD might be the better choice.
Ultimately, the decision of which fund to choose depends on your individual investment goals and risk tolerance. It’s important to do your own research and consult with a financial advisor before making any investment decisions.
Final Thoughts: DIA vs SCHD
Well, after all that research, I have to say that the difference between DIA and SCHD is not as clear-cut as I thought it would be. Both funds have their pros and cons, and which one is right for you really depends on your investment goals and risk tolerance.
On the one hand, DIA has a lower expense ratio than SCHD, which could save you money in the long run. However, it also has a lower exposure to the financial services sector, which could limit your potential returns.
And let’s not forget that DIA has provided lower returns than SCHD over the past 8 years.
On the other hand, SCHD has a higher expense ratio, but it also has a higher exposure to the financial services sector and a lower standard deviation. Plus, it has provided higher returns than DIA over the past 8 years.
So, what’s the bottom line? If you’re looking for a low-cost fund with less exposure to the financial services sector, DIA might be the way to go. But if you’re willing to pay a little more in fees for potentially higher returns and more exposure to the financial services sector, SCHD could be the better choice.
Do your own research, consider your investment goals and risk tolerance, and choose the fund that’s right for you. And hey, if all else fails, you could always flip a coin! (I kid)
One Last Thing…
