GNMA vs SCHD
iShares GNMA Bond ETF vs Schwab US Dividend Equity ETF
Quick Verdict
SCHD has a lower expense ratio. SCHD delivered stronger 1-year returns. GNMA offers more diversification with 313 holdings.
Side-by-Side Comparison
| Metric | GNMA | SCHD | Winner |
|---|---|---|---|
| Expense Ratio | 0.10% | 0.06% | |
| AUM | $423M | $103.7B | |
| Dividend Yield | 4.22% | 3.31% | |
| Holdings | 347 | 104 | |
| YTD Return | -0.03% | +25.33% | |
| 1Y Return | +3.18% | +32.31% | |
| 3Y Return (annualized) | +4.58% | +15.40% | |
| 5Y Return (annualized) | +0.38% | +9.70% | |
| Volatility (annualized) | 4.5% | 13.6% | |
| Max Drawdown | -19.5% | -33.4% | |
| Fund Family | iShares by BlackRock (US) | Charles Schwab Asset Management | |
| Category | Fixed Income | Equity | |
| Inception | Feb 14, 2012 | Oct 20, 2011 |
GNMA vs SCHD Performance
iShares GNMA Bond ETF (GNMA) 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 GNMA returned +3.18% while SCHD returned +32.31%. Year to date, GNMA is down 0.03% versus a gain of 25.33% for SCHD.
Over three years, GNMA compounded at +4.58% per year against +15.40% for SCHD; over five years the annualized figures are +0.38% and +9.70% respectively. Across the full 15-year window we track, SCHD has the edge at +11.45% annualized vs +0.16%. 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 4.5% for GNMA. 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 -19.5% for GNMA 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 0.27. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
GNMA charges 0.10% per year while SCHD charges 0.06%. On a $10,000 position that is $10 vs $6 annually, a gap of $4 per year that compounds over a long holding period. On income, GNMA currently yields 4.22% against 3.31% for SCHD.
Holdings Overlap
GNMA and SCHD share 0 holdings out of 413 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, GNMA or SCHD?
GNMA has an expense ratio of 0.10% while SCHD charges 0.06%. SCHD is the cheaper option. On a $10,000 investment, that is $4 per year of difference.
Which performed better, GNMA or SCHD?
Over the past year GNMA returned +3.18% vs +32.31% for SCHD, so SCHD leads on 1-year performance. Over the longest common window we track (15 years), GNMA annualized +0.16% vs +11.45% for SCHD. Past performance does not guarantee future results.
Which is riskier, GNMA or SCHD?
SCHD has been the more volatile fund at 13.6% annualized versus 4.5% for GNMA. Worst drawdown: GNMA -19.5% vs SCHD -33.4%.
Should I hold both GNMA and SCHD?
GNMA and SCHD have a monthly-return correlation of 0.27, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between GNMA and SCHD?
GNMA and SCHD share 0 common holdings with a 0.0% weight overlap. Combined, they hold 413 unique securities.
Which pays a higher dividend, GNMA or SCHD?
GNMA yields 4.22% while SCHD yields 3.31%, so GNMA currently pays the higher dividend yield.
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