SCHD vs VFQY
Schwab US Dividend Equity ETF vs Vanguard US Quality Factor ETF
Quick Verdict
SCHD has a lower expense ratio. SCHD delivered stronger 1-year returns. VFQY offers more diversification with 404 holdings.
Side-by-Side Comparison
| Metric | SCHD | VFQY | Winner |
|---|---|---|---|
| Expense Ratio | 0.06% | 0.13% | |
| AUM | $103.7B | $474M | |
| Dividend Yield | 3.31% | 1.39% | |
| Holdings | 104 | 409 | |
| YTD Return | +26.21% | +16.29% | |
| 1Y Return | +29.99% | +19.58% | |
| 3Y Return (annualized) | +15.73% | +16.37% | |
| 5Y Return (annualized) | +9.67% | +9.31% | |
| Volatility (annualized) | 13.6% | 18.2% | |
| Max Drawdown | -33.4% | -37.4% | |
| Fund Family | Charles Schwab Asset Management | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Oct 20, 2011 | Feb 13, 2018 |
SCHD vs VFQY Performance
Schwab US Dividend Equity ETF (SCHD) is a ETF from Charles Schwab Asset Management and Vanguard US Quality Factor ETF (VFQY) is a ETF from Vanguard (US). Over the past year SCHD returned +29.99% while VFQY returned +19.58%. Year to date, SCHD is up 26.21% versus a gain of 16.29% for VFQY.
Over three years, SCHD compounded at +15.73% per year against +16.37% for VFQY; over five years the annualized figures are +9.67% and +9.31% respectively. Across the full 9-year window we track, VFQY has the edge at +11.88% annualized vs +11.50%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VFQY has been the more volatile fund, with annualized monthly volatility of 18.2% 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 -33.4% for SCHD and -37.4% for VFQY. 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 0.87. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
SCHD charges 0.06% per year while VFQY charges 0.13%. On a $10,000 position that is $6 vs $13 annually, a gap of $7 per year that compounds over a long holding period. On income, SCHD currently yields 3.31% against 1.39% for VFQY.
Holdings Overlap
SCHD and VFQY share 29 holdings out of 475 unique holdings combined, representing a 8.3% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, SCHD or VFQY?
SCHD has an expense ratio of 0.06% while VFQY charges 0.13%. SCHD is the cheaper option. On a $10,000 investment, that is $7 per year of difference.
Which performed better, SCHD or VFQY?
Over the past year SCHD returned +29.99% vs +19.58% for VFQY, so SCHD leads on 1-year performance. Over the longest common window we track (9 years), SCHD annualized +11.50% vs +11.88% for VFQY. Past performance does not guarantee future results.
Which is riskier, SCHD or VFQY?
VFQY has been the more volatile fund at 18.2% annualized versus 13.6% for SCHD. Worst drawdown: SCHD -33.4% vs VFQY -37.4%.
Should I hold both SCHD and VFQY?
SCHD and VFQY have a monthly-return correlation of 0.87, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SCHD and VFQY?
SCHD and VFQY share 29 common holdings with a 8.3% weight overlap. Combined, they hold 475 unique securities.
Which pays a higher dividend, SCHD or VFQY?
SCHD yields 3.31% while VFQY yields 1.39%, so SCHD currently pays the higher dividend yield.
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