PREF vs SCHD
PREF vs SCHD
Principal Spectrum Preferred Securities Active ETF vs Schwab US Dividend Equity ETF
Quick Verdict
SCHD has a lower expense ratio. SCHD delivered stronger 1-year returns. PREF offers more diversification with 113 holdings.
Side-by-Side Comparison
| Metric | PREF | SCHD | Winner |
|---|---|---|---|
| Expense Ratio | 0.55% | 0.06% | |
| AUM | $1.8B | $103.7B | |
| Dividend Yield | 5.13% | 3.31% | |
| Holdings | 153 | 104 | |
| YTD Return | +1.43% | +24.26% | |
| 1Y Return | +4.77% | +31.38% | |
| 3Y Return (annualized) | +8.16% | +15.08% | |
| 5Y Return (annualized) | +2.65% | +9.72% | |
| Volatility (annualized) | 7.8% | 13.6% | |
| Max Drawdown | -23.3% | -33.4% | |
| Fund Family | Principal Funds | Charles Schwab Asset Management | |
| Category | Allocation/Balanced | Equity | |
| Inception | Jul 10, 2017 | Oct 20, 2011 |
PREF vs SCHD Performance
Principal Spectrum Preferred Securities Active ETF (PREF) is a ETF from Principal Funds and Schwab US Dividend Equity ETF (SCHD) is a ETF from Charles Schwab Asset Management. Over the past year PREF returned +4.77% while SCHD returned +31.38%. Year to date, PREF is up 1.43% versus a gain of 24.26% for SCHD.
Over three years, PREF compounded at +8.16% per year against +15.08% for SCHD; over five years the annualized figures are +2.65% and +9.72% respectively. Across the full 9-year window we track, SCHD has the edge at +11.39% annualized vs +2.07%. 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 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 worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.63. They move independently enough that combining them can meaningfully diversify a portfolio.
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 5.13% against 3.31% for SCHD.
Holdings Overlap
PREF and SCHD share 1 holdings out of 212 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in PREF | Weight in SCHD | Difference |
|---|---|---|---|
| GVMXX | 0.09% | 0.04% | 0.05% |
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. On a $10,000 investment, that is $49 per year of difference.
Which performed better, PREF or SCHD?
Over the past year PREF returned +4.77% vs +31.38% for SCHD, so SCHD leads on 1-year performance. Over the longest common window we track (9 years), PREF annualized +2.07% vs +11.39% for SCHD. Past performance does not guarantee future results.
Which is riskier, PREF or SCHD?
SCHD has been the more volatile fund at 13.6% 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 combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between PREF and SCHD?
PREF and SCHD share 1 common holdings with a 0.0% weight overlap. Combined, they hold 212 unique securities.
Which pays a higher dividend, PREF or SCHD?
PREF yields 5.13% while SCHD yields 3.31%, so PREF currently pays the higher dividend yield.
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