FESM vs SCHD
Fidelity Enhanced Small Cap Core ETF vs Schwab US Dividend Equity ETF
Quick Verdict
SCHD has a lower expense ratio. FESM delivered stronger 1-year returns. FESM offers more diversification with 789 holdings.
Side-by-Side Comparison
| Metric | FESM | SCHD | Winner |
|---|---|---|---|
| Expense Ratio | 0.28% | 0.06% | |
| AUM | $6.0B | $112.2B | |
| Dividend Yield | 0.73% | 3.13% | |
| Holdings | 789 | 103 | |
| YTD Return | +24.44% | +27.89% | |
| 1Y Return | +34.58% | +29.93% | |
| 3Y Return (annualized) | - | +16.13% | |
| 5Y Return (annualized) | - | +10.00% | |
| Volatility (annualized) | 19.8% | 13.6% | |
| Max Drawdown | -26.9% | -33.4% | |
| Fund Family | Fidelity Investments (US) | Charles Schwab Asset Management | |
| Category | Equity | Equity | |
| Inception | Nov 20, 2023 | Oct 20, 2011 |
FESM vs SCHD Performance
Fidelity Enhanced Small Cap Core ETF (FESM) is a ETF from Fidelity Investments (US) and Schwab US Dividend Equity ETF (SCHD) is a ETF from Charles Schwab Asset Management. Over the past year FESM returned +34.58% while SCHD returned +29.93%. Year to date, FESM is up 24.44% versus a gain of 27.89% for SCHD.
Risk: Volatility and Drawdowns
FESM has been the more volatile fund, with annualized monthly volatility of 19.8% 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 -26.9% for FESM 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 0.60. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FESM 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, FESM currently yields 0.73% against 3.13% for SCHD.
Holdings Overlap
FESM and SCHD share 15 holdings out of 818 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, FESM or SCHD?
FESM 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, FESM or SCHD?
Over the past year FESM returned +34.58% vs +29.93% for SCHD, so FESM leads on 1-year performance. Over the longest common window we track (3 years), FESM annualized +26.62% vs +11.56% for SCHD. Past performance does not guarantee future results.
Which is riskier, FESM or SCHD?
FESM has been the more volatile fund at 19.8% annualized versus 13.6% for SCHD. Worst drawdown: FESM -26.9% vs SCHD -33.4%.
Should I hold both FESM and SCHD?
FESM and SCHD have a monthly-return correlation of 0.60, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FESM and SCHD?
FESM and SCHD share 15 common holdings with a 0.7% weight overlap. Combined, they hold 818 unique securities.
Which pays a higher dividend, FESM or SCHD?
FESM yields 0.73% while SCHD yields 3.13%, so SCHD currently pays the higher dividend yield.
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