FAD vs SCHD
First Trust Multi Cap Growth AlphaDEX Fund vs Schwab US Dividend Equity ETF
Quick Verdict
SCHD has a lower expense ratio. SCHD delivered stronger 1-year returns. FAD offers more diversification with 677 holdings.
Side-by-Side Comparison
| Metric | FAD | SCHD | Winner |
|---|---|---|---|
| Expense Ratio | 0.63% | 0.06% | |
| AUM | $608M | $108.7B | |
| Dividend Yield | 0.10% | 3.13% | |
| Holdings | 677 | 104 | |
| YTD Return | +18.43% | +25.69% | |
| 1Y Return | +27.11% | +30.41% | |
| 3Y Return (annualized) | +24.34% | +16.03% | |
| 5Y Return (annualized) | +10.70% | +9.64% | |
| Volatility (annualized) | 18.7% | 13.6% | |
| Max Drawdown | -54.5% | -33.4% | |
| Fund Family | First Trust Portfolios (US) | Charles Schwab Asset Management | |
| Category | Equity | Equity | |
| Inception | May 8, 2007 | Oct 20, 2011 |
FAD vs SCHD Performance
First Trust Multi Cap Growth AlphaDEX Fund (FAD) 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 FAD returned +27.11% while SCHD returned +30.41%. Year to date, FAD is up 18.43% versus a gain of 25.69% for SCHD.
Over three years, FAD compounded at +24.34% per year against +16.03% for SCHD; over five years the annualized figures are +10.70% and +9.64% respectively. Across the full 15-year window we track, SCHD has the edge at +11.46% annualized vs +10.31%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FAD has been the more volatile fund, with annualized monthly volatility of 18.7% 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 -54.5% for FAD 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 0.75. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FAD charges 0.63% per year while SCHD charges 0.06%. On a $10,000 position that is $63 vs $6 annually, a gap of $57 per year that compounds over a long holding period. On income, FAD currently yields 0.10% against 3.13% for SCHD.
Holdings Overlap
FAD and SCHD share 16 holdings out of 747 unique holdings combined, representing a 2.5% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FAD or SCHD?
FAD has an expense ratio of 0.63% while SCHD charges 0.06%. SCHD is the cheaper option. On a $10,000 investment, that is $57 per year of difference.
Which performed better, FAD or SCHD?
Over the past year FAD returned +27.11% vs +30.41% for SCHD, so SCHD leads on 1-year performance. Over the longest common window we track (15 years), FAD annualized +10.31% vs +11.46% for SCHD. Past performance does not guarantee future results.
Which is riskier, FAD or SCHD?
FAD has been the more volatile fund at 18.7% annualized versus 13.6% for SCHD. Worst drawdown: FAD -54.5% vs SCHD -33.4%.
Should I hold both FAD and SCHD?
FAD and SCHD have a monthly-return correlation of 0.75, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FAD and SCHD?
FAD and SCHD share 16 common holdings with a 2.5% weight overlap. Combined, they hold 747 unique securities.
Which pays a higher dividend, FAD or SCHD?
FAD yields 0.10% while SCHD yields 3.13%, so SCHD currently pays the higher dividend yield.
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