SCHX vs SCHD: Let’s Settle This ETF Feud!LAST UPDATED: July 16, 2023 | By Conrad Golly
When it comes to investing in ETFs, it’s easy to get overwhelmed by the sheer number of options available. Two popular ETFs that often get compared are SCHX and SCHD.
As someone who’s constantly trying to make the most of my investments, I decided to dig into the differences between these two large-cap ETFs SCHX vs SCHD.
First off, let’s talk about expense ratios. As someone who’s always looking to minimize costs, this is an important factor for me. SCHX has a lower expense ratio than SCHD, which could make it an attractive option for cost-conscious investors. However, there are other factors to consider beyond just fees.
One of the key differences between these two ETFs is their focus on dividend yield. SCHD is designed to track the performance of high-dividend-yielding US equities, while SCHX is a broader large-cap ETF that doesn’t specifically target dividend-paying stocks. Depending on your investment goals, this could be a deciding factor in which ETF you choose to invest in.
What is SCHX vs SCHD?
As someone who is new to investing, I was curious about the difference between SCHX and SCHD. So, I did some digging and here’s what I found.
SCHX and SCHD are both exchange-traded funds (ETFs) that are part of the Schwab ETF family. SCHX is designed to track the performance of the Dow Jones U.S. Large-Cap Total Stock Market Index, while SCHD is designed to track the performance of the Dow Jones U.S. Dividend 100 Index.
Now, let’s break down what that actually means. SCHX is an ETF that invests in a diverse range of large-cap stocks in the U.S. market. On the other hand, SCHD invests in 100 high dividend yielding U.S. companies.
Both ETFs are passively managed, which means that they are designed to track the performance of their respective indices. As a result, they have lower expense ratios compared to actively managed funds.
Here’s a quick rundown of some of the key differences between SCHX and SCHD:
|Issuer||Charles Schwab||Charles Schwab|
|Family||Schwab ETFs||Schwab ETFs|
|Underlying Index||Dow Jones U.S. Large-Cap Total Stock Market Index||Dow Jones U.S. Dividend 100 Index|
In summary, both SCHX and SCHD are ETFs that are part of the Schwab ETF family. They have different underlying indices, which means that they invest in different types of stocks. However, they are both passively managed and have lower expense ratios compared to actively managed funds.
SCHX vs SCHD: Performance Comparison
When it comes to investing in the stock market, it’s important to know the difference between two similar-sounding ETFs, SCHX and SCHD. In this section, I will compare the performance of these two ETFs in terms of YTD return, 1-year return, 3-year return, 5-year return, and 10-year return.
As of the current date of 2023-04-29, SCHX has achieved a YTD return of 8.10%, which is significantly higher than SCHD’s -1.30% return. This means that SCHX has performed better than SCHD so far this year.
Over the past year, SCHX has delivered a return of 16.03%, while SCHD has returned 6.91%. This means that SCHX has outperformed SCHD in terms of 1-year return.
Looking at the 3-year return, SCHX has an annualized return of 15.14%, which is slightly higher than SCHD’s 14.79% return. This means that SCHX has performed slightly better than SCHD over the past 3 years.
Over the past 5 years, SCHD has achieved a higher annualized return of 13.62%, compared to SCHX’s 12.03% return. This means that SCHD has performed better than SCHX in terms of 5-year return.
Both SCHX and SCHD have delivered pretty close results over the past 10 years, with SCHX having a 12.18% annualized return and SCHD not far behind at 12.12%. This means that both ETFs have performed similarly in terms of 10-year return.
To put these returns into perspective, it’s worth noting that both SCHX and SCHD track different indices. SCHX tracks the Dow Jones U.S. Large-Cap Total Stock Market Index, which includes the top 750 companies in the U.S. by market capitalization. On the other hand, SCHD tracks the Dow Jones U.S. Dividend 100 Index, which includes 100 high dividend yielding U.S. companies.
While both SCHX and SCHD have their own strengths and weaknesses, it’s important to consider your own investment goals and risk tolerance before making a decision.
SCHX vs SCHD: Expense Ratio and Dividend Yield
When it comes to deciding between SCHX and SCHD, expense ratio and dividend yield are two important factors to consider. As someone who wants to make the most out of my investment, I want to ensure that I am getting the best bang for my buck.
Let’s start with expense ratio. SCHX has a lower expense ratio than SCHD, with SCHX’s ratio at 0.03% compared to SCHD’s 0.06%. This means that SCHX is more cost-effective and can save me more money in the long run.
However, it’s important to note that a higher expense ratio doesn’t necessarily mean that SCHD is a bad investment. It just means that I’ll be paying more in fees.
Next, let’s talk about dividend yield. SCHD has a higher dividend yield than SCHX, with SCHD’s yield at 4.27% compared to SCHX’s 1.89%. This means that SCHD is a better option if I’m looking for a higher return on my investment. However, it’s important to note that a higher dividend yield doesn’t necessarily mean that SCHD is a better investment. It just means that I’ll be receiving more dividends.
In summary, when it comes to expense ratio and dividend yield, SCHX is the more cost-effective option, while SCHD offers a higher return on investment. Ultimately, the decision between the two depends on my personal investment goals and risk tolerance.
SCHX vs SCHD: Holdings Comparison
When it comes to choosing between SCHX and SCHD, the holdings comparison is an important factor to consider. In this section, I will take a closer look at the holdings of both ETFs and compare them.
Top 10 Holdings
Let’s start by looking at the top 10 holdings of SCHX and SCHD.
The top 10 holdings of SCHX are:
|Amazon.com, Inc.||AMZN||Consumer Discretionary|
|Alphabet Inc.||GOOGL||Communication Services|
|Tesla, Inc.||TSLA||Consumer Discretionary|
|Berkshire Hathaway Inc.||BRK.B||Financials|
|Alphabet Inc.||GOOG||Communication Services|
|Meta Platforms, Inc.||META||Communication Services|
|Exxon Mobil Corporation||XOM||Energy|
On the other hand, the top 10 holdings of SCHD are:
|Johnson & Johnson||JNJ||Healthcare|
|Procter & Gamble Company||PG||Consumer Staples|
|PepsiCo, Inc.||PEP||Consumer Staples|
|Verizon Communications Inc.||VZ||Communication Services|
|The Coca-Cola Company||KO||Consumer Staples|
|AT&T Inc.||T||Communication Services|
|Merck & Co., Inc.||MRK||Healthcare|
|Cisco Systems, Inc.||CSCO||Technology|
As you can see, the top 10 holdings of SCHX are more focused on technology stocks, while the top 10 holdings of SCHD are more diversified across different sectors.
Speaking of sectors, let’s take a closer look at the sector breakdown of both ETFs.
Here’s a table showing the sector breakdown of SCHX and SCHD:
|ETF||Technology||Healthcare||Consumer Discretionary||Communication Services||Financials||Consumer Staples||Energy||Industrials||Utilities||Materials||Real Estate|
As you can see, SCHX is more focused on technology and communication services, while SCHD is more diversified across different sectors, with a higher exposure to healthcare and consumer staples.
In conclusion, when it comes to the holdings comparison between SCHX and SCHD, it’s clear that SCHX is more focused on technology stocks, while SCHD is more diversified across different sectors. It’s up to you to decide which ETF suits your investment goals and risk tolerance.
SCHX vs SCHD: Category Comparison
When it comes to investing in ETFs, there are a lot of options out there. Two popular choices are SCHX and SCHD. But what’s the difference between them? Let’s take a look at how they compare in different categories.
SCHX and SCHD both fall under the category of Large Blend. This means they invest in large-cap stocks with a mix of growth and value characteristics. However, there are some differences between the two.
SCHX has a larger number of holdings (779) compared to SCHD (419). This means SCHX is more diversified and less concentrated in individual stocks. SCHX also has a lower expense ratio (0.03%) than SCHD (0.06%).
On the other hand, SCHD has a higher dividend yield (3.16%) than SCHX (2.44%). This means SCHD can be a good choice for investors looking for income.
SCHD is classified as Large Value, while SCHX is not. Large Value ETFs invest in large-cap stocks that are considered undervalued by the market.
SCHD has a higher exposure to value stocks compared to SCHX. In fact, the top three sectors in SCHD are all value-oriented (Financials, Health Care, and Consumer Staples). This means SCHD may be a good choice for investors looking for value stocks.
However, SCHX has a slightly higher mean return (1.24 points higher) than SCHD. SCHX also has a higher R-squared (99.83 points higher) and slightly more volatility (Standard Deviation of 13.8) compared to SCHD.
In summary, both SCHX and SCHD have their pros and cons. SCHX is more diversified and has a lower expense ratio, while SCHD has a higher dividend yield and can be a good choice for income-seeking investors. SCHD also has a higher exposure to value stocks.
The choice between the two will depend on your investment goals and risk tolerance.
SCHX vs SCHD: Sharpe Ratio Comparison
When it comes to comparing SCHX and SCHD, one of the metrics that investors often look at is the Sharpe ratio. The Sharpe ratio is a measure of risk-adjusted return, which takes into account the volatility of an investment. In simple terms, it tells you how much return you are getting for each unit of risk.
As of the current date, SCHD has a higher Sharpe ratio than SCHX. According to ETF Database, SCHD has a Sharpe ratio of 0.71, while SCHX has a Sharpe ratio of 0.67. This means that SCHD is providing a higher return for each unit of risk taken.
However, it’s important to note that the Sharpe ratio is just one metric, and investors should not rely solely on it when making investment decisions. It’s also important to consider other factors such as expense ratio, holdings, and performance over a longer period of time.
Looking at the performance of SCHX and SCHD over the past 10 years, both investments have delivered similar results.
According to PortfoliosLab, SCHX has a 12.18% annualized return, while SCHD has a 12.12% annualized return. However, SCHD has a higher expense ratio than SCHX, which is something investors should keep in mind.
While SCHD has a higher Sharpe ratio than SCHX, investors should consider other factors as well when making investment decisions. It’s important to do your own research and consider your own risk tolerance before investing in any ETF.
SCHX vs SCHD: AUM Comparison
When it comes to comparing two ETFs, one of the first things I like to look at is their AUM, or assets under management. It’s a good indicator of how popular the ETF is and how much money investors have put into it. So, let’s take a look at how SCHX and SCHD stack up against each other in terms of AUM.
First off, let me just say that both of these ETFs have some serious cash backing them up. According to ETF Database, as of April 29th, 2023, SCHX has an AUM of $31.41 billion, while SCHD has an AUM of $26.18 billion. That’s a lot of money, folks.
But, as you can see, SCHX has a slightly higher AUM than SCHD. Does that mean SCHX is the better ETF? Not necessarily. AUM is just one factor to consider when choosing an ETF.
It’s also worth noting that both of these ETFs have seen some serious growth in their AUM over the past few years. In fact, SCHD’s AUM has almost doubled since 2018, while SCHX’s AUM has increased by over 50% in the same time period.
So, what does all of this mean for investors?
Well, it means that both SCHX and SCHD are popular choices among investors, and that they both have a lot of money backing them up. Ultimately, the decision between the two will come down to other factors, such as fees, performance, and holdings. But, when it comes to AUM, both of these ETFs are doing pretty darn well for themselves.
SCHX vs SCHD: Score Comparison
As I was researching SCHX vs SCHD, I came across a tool called Finny Score.
It’s a nifty little tool that compares different ETFs based on several metrics, including fees, returns, and risk. So, I decided to put SCHX and SCHD to the test and see how they stack up against each other using Finny Score.
First up, let’s take a look at the fees. SCHX has a lower expense ratio than SCHD, with a fee of just 0.03% compared to SCHD’s 0.06%. That’s a win for SCHX in my book.
Next, let’s talk about returns. According to Finny Score, SCHD has a higher 5-year return than SCHX, with a return of 13.62% compared to SCHX’s 12.03%. However, when it comes to year-to-date returns, SCHX is the clear winner, with a return of 8.10% compared to SCHD’s -1.30%.
Now, let’s talk about risk. Finny Score uses a metric called Sharpe Ratio to measure risk-adjusted returns. According to this metric, SCHD has a higher Sharpe Ratio than SCHX, which means that it has better risk-adjusted returns.
Finally, let’s take a look at the overall Finny Score. SCHD has a higher Finny Score than SCHX, with a score of 87 compared to SCHX’s 81. However, it’s important to note that both of these ETFs have a high Finny Score, which means that they are both good investment options.
While SCHD has a higher Finny Score and a higher 5-year return, SCHX has a lower expense ratio and a higher year-to-date return. Ultimately, the choice between these two ETFs will depend on your investment goals and risk tolerance.
SCHX vs SCHD: Stock Wars
As I was researching the differences between SCHX and SCHD, I stumbled upon another tool called Finmasters Stock Wars. It’s a fun tool that lets you compare the performance of any two stocks or ETFs you want. So, naturally, I had to pit SCHX against SCHD to see which one would come out on top.
First, let’s talk about the basics. SCHX is the Schwab US Large-Cap ETF, while SCHD is the Schwab US Dividend Equity ETF. Both are designed to track different indexes and have different investment objectives. SCHX aims to provide exposure to the largest US companies, while SCHD focuses on high-quality US companies with a history of consistent dividends.
Now, let’s get to the fun part: the numbers. According to Finmasters Stock Wars, if I had invested $10,000 in SCHX on April 29, 2013, it would have grown to $24,710 by April 29, 2023. Not too shabby, right? But if I had invested the same amount in SCHD on the same day, it would have grown to $28,611. That’s a difference of almost $4,000!
Of course, past performance is no guarantee of future results, and there are many factors to consider when choosing an ETF. But it’s still interesting to see how these two funds have performed over the years.
Here are some more numbers to chew on:
- SCHD has a higher expense ratio than SCHX (0.06% vs 0.03%).
- SCHD has a higher dividend yield than SCHX (3.03% vs 1.68%).
- SCHX has a higher P/E ratio than SCHD (20.32 vs 18.69).
- Both funds have similar holdings in terms of sector allocation, with the largest allocations in Information Technology, Health Care, and Consumer Discretionary.
While both SCHX and SCHD have their strengths and weaknesses, it’s clear that SCHD has been the better performer over the past decade. But don’t take my word for it – try out Finmasters Stock Wars for yourself and see which ETF comes out on top!
The Bottom Line: SCHX vs SCHD
So, after comparing SCHX and SCHD, what’s the verdict? Well, it’s not as simple as saying one is better than the other. Both ETFs have their pros and cons, and ultimately, the decision of which one to invest in comes down to your personal investment strategy and goals.
If you’re looking for an ETF with lower expense ratios and higher exposure to the technology sector, then SCHX might be the way to go. On the other hand, if you’re interested in value stocks and a higher dividend yield, then SCHD could be the better option.
One thing to keep in mind is that both ETFs are managed by Schwab Strategic Trust. SCHD is the Schwab U.S. Dividend Equity ETF, while SCHX is the Schwab U.S. Large-Cap ETF. Both ETFs track different benchmark indexes and have slightly different investment strategies.
When it comes to performance, both ETFs have delivered pretty close results over the past 10 years. SCHX has a 12.18% annualized return, while SCHD is not far behind at 12.12%. However, in the year-to-date period, SCHX achieves an 8.10% return, which is significantly lower than SCHD’s -1.30% return.
So, go ahead and do your research, weigh your options, and make the investment decision that’s right for you.
Before you go…