AFSM vs SCHD
First Trust Active Factor Small Cap ETF vs Schwab US Dividend Equity ETF
Quick Verdict
SCHD has a lower expense ratio. AFSM delivered stronger 1-year returns. AFSM offers more diversification with 335 holdings.
Side-by-Side Comparison
| Metric | AFSM | SCHD | Winner |
|---|---|---|---|
| Expense Ratio | 0.75% | 0.06% | |
| AUM | $123M | $108.7B | |
| Dividend Yield | 0.51% | 3.13% | |
| Holdings | 335 | 104 | |
| YTD Return | +26.44% | +25.69% | |
| 1Y Return | +33.17% | +30.41% | |
| 3Y Return (annualized) | +20.18% | +16.03% | |
| 5Y Return (annualized) | +11.01% | +9.64% | |
| Volatility (annualized) | 22.1% | 13.6% | |
| Max Drawdown | -43.5% | -33.4% | |
| Fund Family | First Trust Portfolios (US) | Charles Schwab Asset Management | |
| Category | Equity | Equity | |
| Inception | Dec 4, 2019 | Oct 20, 2011 |
AFSM vs SCHD Performance
First Trust Active Factor Small Cap ETF (AFSM) is a ETF from First Trust Portfolios (US) and Schwab US Dividend Equity ETF (SCHD) is a ETF from Charles Schwab Asset Management. Over the past year AFSM returned +33.17% while SCHD returned +30.41%. Year to date, AFSM is up 26.44% versus a gain of 25.69% for SCHD.
Over three years, AFSM compounded at +20.18% per year against +16.03% for SCHD; over five years the annualized figures are +11.01% and +9.64% respectively. Across the full 7-year window we track, AFSM has the edge at +12.24% annualized vs +11.46%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
AFSM has been the more volatile fund, with annualized monthly volatility of 22.1% compared with 13.6% for SCHD. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -43.5% for AFSM and -33.4% for SCHD. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.81. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
AFSM charges 0.75% per year while SCHD charges 0.06%. On a $10,000 position that is $75 vs $6 annually, a gap of $69 per year that compounds over a long holding period. On income, AFSM currently yields 0.51% against 3.13% for SCHD.
Holdings Overlap
AFSM and SCHD share 12 holdings out of 421 unique holdings combined, representing a 0.7% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, AFSM or SCHD?
AFSM has an expense ratio of 0.75% while SCHD charges 0.06%. SCHD is the cheaper option. On a $10,000 investment, that is $69 per year of difference.
Which performed better, AFSM or SCHD?
Over the past year AFSM returned +33.17% vs +30.41% for SCHD, so AFSM leads on 1-year performance. Over the longest common window we track (7 years), AFSM annualized +12.24% vs +11.46% for SCHD. Past performance does not guarantee future results.
Which is riskier, AFSM or SCHD?
AFSM has been the more volatile fund at 22.1% annualized versus 13.6% for SCHD. Worst drawdown: AFSM -43.5% vs SCHD -33.4%.
Should I hold both AFSM and SCHD?
AFSM and SCHD have a monthly-return correlation of 0.81, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between AFSM and SCHD?
AFSM and SCHD share 12 common holdings with a 0.7% weight overlap. Combined, they hold 421 unique securities.
Which pays a higher dividend, AFSM or SCHD?
AFSM yields 0.51% while SCHD yields 3.13%, so SCHD currently pays the higher dividend yield.
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