FDM vs SCHD
First Trust Dow Jones Select MicroCap Index Fund vs Schwab US Dividend Equity ETF
Quick Verdict
SCHD has a lower expense ratio. FDM delivered stronger 1-year returns. FDM offers more diversification with 149 holdings.
Side-by-Side Comparison
| Metric | FDM | SCHD | Winner |
|---|---|---|---|
| Expense Ratio | 0.60% | 0.06% | |
| AUM | $277M | $108.7B | |
| Dividend Yield | 1.36% | 3.13% | |
| Holdings | 149 | 104 | |
| YTD Return | +22.05% | +26.54% | |
| 1Y Return | +32.75% | +30.90% | |
| 3Y Return (annualized) | +20.23% | +16.29% | |
| 5Y Return (annualized) | +11.58% | +9.65% | |
| Volatility (annualized) | 21.1% | 13.6% | |
| Max Drawdown | -64.0% | -33.4% | |
| Fund Family | First Trust Portfolios (US) | Charles Schwab Asset Management | |
| Category | Equity | Equity | |
| Inception | Sep 27, 2005 | Oct 20, 2011 |
FDM vs SCHD Performance
First Trust Dow Jones Select MicroCap Index Fund (FDM) 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 FDM returned +32.75% while SCHD returned +30.90%. Year to date, FDM is up 22.05% versus a gain of 26.54% for SCHD.
Over three years, FDM compounded at +20.23% per year against +16.29% for SCHD; over five years the annualized figures are +11.58% and +9.65% respectively. Across the full 15-year window we track, SCHD has the edge at +11.51% annualized vs +8.19%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FDM has been the more volatile fund, with annualized monthly volatility of 21.1% 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 -64.0% for FDM 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
FDM charges 0.60% per year while SCHD charges 0.06%. On a $10,000 position that is $60 vs $6 annually, a gap of $54 per year that compounds over a long holding period. On income, FDM currently yields 1.36% against 3.13% for SCHD.
Holdings Overlap
FDM and SCHD share 5 holdings out of 241 unique holdings combined, representing a 0.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FDM or SCHD?
FDM has an expense ratio of 0.60% while SCHD charges 0.06%. SCHD is the cheaper option. On a $10,000 investment, that is $54 per year of difference.
Which performed better, FDM or SCHD?
Over the past year FDM returned +32.75% vs +30.90% for SCHD, so FDM leads on 1-year performance. Over the longest common window we track (15 years), FDM annualized +8.19% vs +11.51% for SCHD. Past performance does not guarantee future results.
Which is riskier, FDM or SCHD?
FDM has been the more volatile fund at 21.1% annualized versus 13.6% for SCHD. Worst drawdown: FDM -64.0% vs SCHD -33.4%.
Should I hold both FDM and SCHD?
FDM 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 FDM and SCHD?
FDM and SCHD share 5 common holdings with a 0.1% weight overlap. Combined, they hold 241 unique securities.
Which pays a higher dividend, FDM or SCHD?
FDM yields 1.36% while SCHD yields 3.13%, so SCHD currently pays the higher dividend yield.
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