SCHD vs SMBS
Schwab US Dividend Equity ETF vs Schwab Mortgage-Backed Securities ETF
Quick Verdict
SMBS has a lower expense ratio. SCHD delivered stronger 1-year returns. SMBS offers more diversification with 4175 holdings.
Side-by-Side Comparison
| Metric | SCHD | SMBS | Winner |
|---|---|---|---|
| Expense Ratio | 0.06% | 0.03% | |
| AUM | $103.7B | $6.5B | |
| Dividend Yield | 3.31% | 5.14% | |
| Holdings | 104 | 4,175 | |
| YTD Return | +25.33% | -0.17% | |
| 1Y Return | +32.31% | +3.45% | |
| 3Y Return (annualized) | +15.40% | - | |
| 5Y Return (annualized) | +9.70% | - | |
| Volatility (annualized) | 13.6% | 3.6% | |
| Max Drawdown | -33.4% | -3.2% | |
| Fund Family | Charles Schwab Asset Management | Charles Schwab Asset Management | |
| Category | Equity | Fixed Income | |
| Inception | Oct 20, 2011 | Nov 19, 2024 |
SCHD vs SMBS Performance
Schwab US Dividend Equity ETF (SCHD) is a ETF from Charles Schwab Asset Management and Schwab Mortgage-Backed Securities ETF (SMBS) is a ETF from Charles Schwab Asset Management. Over the past year SCHD returned +32.31% while SMBS returned +3.45%. Year to date, SCHD is up 25.33% versus a loss of 0.17% for SMBS.
Risk: Volatility and Drawdowns
SCHD has been the more volatile fund, with annualized monthly volatility of 13.6% compared with 3.6% for SMBS. 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 -33.4% for SCHD and -3.2% for SMBS. 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 0.36. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
SCHD charges 0.06% per year while SMBS charges 0.03%. On a $10,000 position that is $6 vs $3 annually, a gap of $3 per year that compounds over a long holding period. On income, SCHD currently yields 3.31% against 5.14% for SMBS.
Frequently Asked Questions
Which is cheaper, SCHD or SMBS?
SCHD has an expense ratio of 0.06% while SMBS charges 0.03%. SMBS is the cheaper option. On a $10,000 investment, that is $3 per year of difference.
Which performed better, SCHD or SMBS?
Over the past year SCHD returned +32.31% vs +3.45% for SMBS, so SCHD leads on 1-year performance. Over the longest common window we track (2 years), SCHD annualized +11.45% vs +4.14% for SMBS. Past performance does not guarantee future results.
Which is riskier, SCHD or SMBS?
SCHD has been the more volatile fund at 13.6% annualized versus 3.6% for SMBS. Worst drawdown: SCHD -33.4% vs SMBS -3.2%.
Should I hold both SCHD and SMBS?
SCHD and SMBS have a monthly-return correlation of 0.36, so combining them can provide real diversification depending on your allocation goals.
Which pays a higher dividend, SCHD or SMBS?
SCHD yields 3.31% while SMBS yields 5.14%, so SMBS currently pays the higher dividend yield.
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