BAB vs SCHD
Invesco Taxable Municipal Bond ETF vs Schwab US Dividend Equity ETF
Quick Verdict
SCHD has a lower expense ratio. SCHD delivered stronger 1-year returns. BAB offers more diversification with 995 holdings.
Side-by-Side Comparison
| Metric | BAB | SCHD | Winner |
|---|---|---|---|
| Expense Ratio | 0.28% | 0.06% | |
| AUM | $1.0B | $103.7B | |
| Dividend Yield | 4.10% | 3.31% | |
| Holdings | 1,480 | 104 | |
| YTD Return | -0.31% | +24.26% | |
| 1Y Return | +3.15% | +31.38% | |
| 3Y Return (annualized) | +4.53% | +15.08% | |
| 5Y Return (annualized) | -1.03% | +9.72% | |
| Volatility (annualized) | 7.3% | 13.6% | |
| Max Drawdown | -27.8% | -33.4% | |
| Fund Family | Invesco (US) | Charles Schwab Asset Management | |
| Category | Tax Preferred | Equity | |
| Inception | Nov 17, 2009 | Oct 20, 2011 |
BAB vs SCHD Performance
Invesco Taxable Municipal Bond ETF (BAB) is a ETF from Invesco (US) and Schwab US Dividend Equity ETF (SCHD) is a ETF from Charles Schwab Asset Management. Over the past year BAB returned +3.15% while SCHD returned +31.38%. Year to date, BAB is down 0.31% versus a gain of 24.26% for SCHD.
Over three years, BAB compounded at +4.53% per year against +15.08% for SCHD; over five years the annualized figures are -1.03% and +9.72% respectively. Across the full 15-year window we track, SCHD has the edge at +11.39% annualized vs +1.53%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SCHD has been the more volatile fund, with annualized monthly volatility of 13.6% compared with 7.3% for BAB. 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 -27.8% for BAB 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 0.21. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
BAB charges 0.28% per year while SCHD charges 0.06%. On a $10,000 position that is $28 vs $6 annually, a gap of $22 per year that compounds over a long holding period. On income, BAB currently yields 4.10% against 3.31% for SCHD.
Holdings Overlap
BAB and SCHD share 0 holdings out of 1095 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, BAB or SCHD?
BAB has an expense ratio of 0.28% while SCHD charges 0.06%. SCHD is the cheaper option. On a $10,000 investment, that is $22 per year of difference.
Which performed better, BAB or SCHD?
Over the past year BAB returned +3.15% vs +31.38% for SCHD, so SCHD leads on 1-year performance. Over the longest common window we track (15 years), BAB annualized +1.53% vs +11.39% for SCHD. Past performance does not guarantee future results.
Which is riskier, BAB or SCHD?
SCHD has been the more volatile fund at 13.6% annualized versus 7.3% for BAB. Worst drawdown: BAB -27.8% vs SCHD -33.4%.
Should I hold both BAB and SCHD?
BAB and SCHD have a monthly-return correlation of 0.21, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between BAB and SCHD?
BAB and SCHD share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1095 unique securities.
Which pays a higher dividend, BAB or SCHD?
BAB yields 4.10% while SCHD yields 3.31%, so BAB currently pays the higher dividend yield.
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