PREF vs SCHD
Principal Spectrum Preferred Securities Active ETF vs Schwab US Dividend Equity ETF
Which is better, PREF or SCHD?
Preferred Stock against Large Cap Value.
SCHD has a lower expense ratio. SCHD led over 1Y, 3Y, 5Y and the full window.
MarketXLS is not an investment adviser. This comparison is generated automatically from market data and is for information only. A Best mark means the better reading on that one measure, not a recommendation to buy.
Side-by-Side Comparison
| Metric | PREF | SCHD |
|---|---|---|
| Expense Ratio | 0.55% | 0.06%Best |
| AUM | $1.9B | $112.1B |
| Dividend Yield | 5.29% | 3.00% |
| Holdings | 163 | 103 |
| YTD Return | +1.26% | +24.23%Best |
| 1Y Return | +3.03% | +27.90%Best |
| 3Y Return (annualized) | +8.13% | +15.55%Best |
| 5Y Return (annualized) | +2.47% | +9.97%Best |
| Volatility (annualized) | 7.8%Best | 15.9% |
| Max Drawdown | -23.3%Best | -33.4% |
| $10,000 over 5 years | $11,298 | $16,083Best |
| Fund Family | Principal Funds | Charles Schwab Asset Management |
| Category | Allocation/Balanced | Equity |
| Style | Preferred Stock | Large Cap Value |
| Inception | Jul 10, 2017 | Oct 20, 2011 |
Not shown on this pair: Top 10 Weight.
Volatility and max drawdown are measured over the window both funds cover: Jul 11, 2017 to Sep 17, 2026 (9.2 years).
PREF vs SCHD growth
Month-end closes. Both lines start at 0% in the first month shown, so the gap between them is the difference in growth across that window. The full view covers the 9.2 years both funds cover.
PREF vs SCHD Performance
Principal Spectrum Preferred Securities Active ETF (PREF) is an ETF from Principal Funds and Schwab US Dividend Equity ETF (SCHD) is an ETF from Charles Schwab Asset Management. Over the past year PREF returned +3.03% while SCHD returned +27.90%. Year to date, PREF is up 1.26% versus a gain of 24.23% for SCHD.
Over three years, PREF compounded at +8.13% per year against +15.55% for SCHD; over five years the annualized figures are +2.47% and +9.97% respectively. Across the full 9-year window we track, SCHD has the edge at +11.61% annualized vs +2.02%.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SCHD has been the more volatile fund, with annualized monthly volatility of 15.9% compared with 7.8% for PREF. 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 -23.3% for PREF and -33.4% for SCHD. Drawdown depth is what each fund did in the worst stretch of the window measured above.
The two funds' monthly returns correlate at 0.63. They move together some of the time, and apart the rest.
Fees and Cost Over Time
PREF charges 0.55% per year while SCHD charges 0.06%. On a $10,000 position that is $55 vs $6 annually, a gap of $49 per year that compounds over a long holding period. On income, PREF currently yields 5.29% against 3.00% for SCHD.
Holdings Overlap
At least 0.1% of SCHD's money is in holdings PREF also owns.
Stated as a floor: for PREF, our book for it covers 72.0% of that fund, so a holding it does not list is one we cannot count as shared. The real figure is this or higher.
We cannot see either book well enough to say how much of this pair is duplicated.
1 positions in common, counted across the 111 positions we hold weights for in PREF and 100 in SCHD, against full books of 163 and 103.
Top Shared Holdings
| Stock | Weight in PREF | Weight in SCHD | Difference |
|---|---|---|---|
| GVMXXState Street Institutional US Government Money Market Fund | 0.38% | 0.06% | 0.32% |
You are not choosing between two funds in isolation.
Whichever of PREF and SCHD you pick has to sit alongside everything else you own. Add the rest and see what the combination actually holds.
Free for up to 10 holdings. No account needed.
Frequently Asked Questions
Which is cheaper, PREF or SCHD?
PREF has an expense ratio of 0.55% while SCHD charges 0.06%. SCHD is the cheaper option, by $49 a year on a $10,000 investment.
Which performed better, PREF or SCHD?
Over the past year PREF returned +3.03% vs +27.90% for SCHD, so SCHD leads on 1-year performance. Over the longest common window we track (9 years), PREF annualized +2.02% vs +11.61% for SCHD. Past performance does not guarantee future results. This is information, not a recommendation.
Which is riskier, PREF or SCHD?
SCHD has been the more volatile fund at 15.9% annualized versus 7.8% for PREF. Worst drawdown: PREF -23.3% vs SCHD -33.4%.
Should I hold both PREF and SCHD?
PREF and SCHD have a monthly-return correlation of 0.63, so their returns are far enough apart for the mix to behave differently from either one alone. This is information, not a recommendation.
Which pays a higher dividend, PREF or SCHD?
PREF yields 5.29% while SCHD yields 3.00%, so PREF currently pays the higher dividend yield.
Is SCHD better than PREF?
SCHD has a lower expense ratio. SCHD led over 1Y, 3Y, 5Y and the full window. Which one suits a particular account depends on what it is for. This is information, not a recommendation.