FALN vs SCHD
iShares Fallen Angels USD Bond ETF vs Schwab US Dividend Equity ETF
Quick Verdict
SCHD has a lower expense ratio. SCHD delivered stronger 1-year returns. FALN offers more diversification with 158 holdings.
Side-by-Side Comparison
| Metric | FALN | SCHD | Winner |
|---|---|---|---|
| Expense Ratio | 0.25% | 0.06% | |
| AUM | $1.6B | $103.7B | |
| Dividend Yield | 6.41% | 3.31% | |
| Holdings | 159 | 104 | |
| YTD Return | +2.05% | +25.62% | |
| 1Y Return | +5.96% | +32.62% | |
| 3Y Return (annualized) | +8.70% | +15.58% | |
| 5Y Return (annualized) | +3.54% | +9.63% | |
| Volatility (annualized) | 9.4% | 13.6% | |
| Max Drawdown | -30.0% | -33.4% | |
| Fund Family | iShares by BlackRock (US) | Charles Schwab Asset Management | |
| Category | Fixed Income | Equity | |
| Inception | Jun 14, 2016 | Oct 20, 2011 |
FALN vs SCHD Performance
iShares Fallen Angels USD Bond ETF (FALN) is a ETF from iShares by BlackRock (US) and Schwab US Dividend Equity ETF (SCHD) is a ETF from Charles Schwab Asset Management. Over the past year FALN returned +5.96% while SCHD returned +32.62%. Year to date, FALN is up 2.05% versus a gain of 25.62% for SCHD.
Over three years, FALN compounded at +8.70% per year against +15.58% for SCHD; over five years the annualized figures are +3.54% and +9.63% respectively. Across the full 10-year window we track, SCHD has the edge at +11.47% annualized vs +3.67%. 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 9.4% for FALN. 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 -30.0% for FALN 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 0.72. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FALN charges 0.25% per year while SCHD charges 0.06%. On a $10,000 position that is $25 vs $6 annually, a gap of $19 per year that compounds over a long holding period. On income, FALN currently yields 6.41% against 3.31% for SCHD.
Holdings Overlap
FALN and SCHD share 0 holdings out of 258 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, FALN or SCHD?
FALN has an expense ratio of 0.25% while SCHD charges 0.06%. SCHD is the cheaper option. On a $10,000 investment, that is $19 per year of difference.
Which performed better, FALN or SCHD?
Over the past year FALN returned +5.96% vs +32.62% for SCHD, so SCHD leads on 1-year performance. Over the longest common window we track (10 years), FALN annualized +3.67% vs +11.47% for SCHD. Past performance does not guarantee future results.
Which is riskier, FALN or SCHD?
SCHD has been the more volatile fund at 13.6% annualized versus 9.4% for FALN. Worst drawdown: FALN -30.0% vs SCHD -33.4%.
Should I hold both FALN and SCHD?
FALN and SCHD have a monthly-return correlation of 0.72, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FALN and SCHD?
FALN and SCHD share 0 common holdings with a 0.0% weight overlap. Combined, they hold 258 unique securities.
Which pays a higher dividend, FALN or SCHD?
FALN yields 6.41% while SCHD yields 3.31%, so FALN currently pays the higher dividend yield.
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