SCHD vs XLB
Schwab US Dividend Equity ETF vs State Street Materials Select Sector SPDR ETF
Quick Verdict
SCHD has a lower expense ratio. SCHD delivered stronger 1-year returns. SCHD offers more diversification with 100 holdings.
Side-by-Side Comparison
| Metric | SCHD | XLB | Winner |
|---|---|---|---|
| Expense Ratio | 0.06% | 0.08% | |
| AUM | $103.7B | $8.6B | |
| Dividend Yield | 3.31% | 1.67% | |
| Holdings | 104 | 29 | |
| YTD Return | +25.33% | +16.25% | |
| 1Y Return | +32.31% | +22.86% | |
| 3Y Return (annualized) | +15.40% | +10.86% | |
| 5Y Return (annualized) | +9.70% | +6.60% | |
| Volatility (annualized) | 13.6% | 20.7% | |
| Max Drawdown | -33.4% | -60.7% | |
| Fund Family | Charles Schwab Asset Management | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Oct 20, 2011 | Dec 16, 1998 |
SCHD vs XLB Performance
Schwab US Dividend Equity ETF (SCHD) is a ETF from Charles Schwab Asset Management and State Street Materials Select Sector SPDR ETF (XLB) is a ETF from SPDR State Street Global Advisors. Over the past year SCHD returned +32.31% while XLB returned +22.86%. Year to date, SCHD is up 25.33% versus a gain of 16.25% for XLB.
Over three years, SCHD compounded at +15.40% per year against +10.86% for XLB; over five years the annualized figures are +9.70% and +6.60% respectively. Across the full 15-year window we track, SCHD has the edge at +11.45% annualized vs +6.49%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLB has been the more volatile fund, with annualized monthly volatility of 20.7% 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 -60.7% for XLB. 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 0.85. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
SCHD charges 0.06% per year while XLB charges 0.08%. On a $10,000 position that is $6 vs $8 annually, a gap of $2 per year that compounds over a long holding period. On income, SCHD currently yields 3.31% against 1.67% for XLB.
Holdings Overlap
SCHD and XLB share 0 holdings out of 127 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, SCHD or XLB?
SCHD has an expense ratio of 0.06% while XLB charges 0.08%. SCHD is the cheaper option. On a $10,000 investment, that is $2 per year of difference.
Which performed better, SCHD or XLB?
Over the past year SCHD returned +32.31% vs +22.86% for XLB, so SCHD leads on 1-year performance. Over the longest common window we track (15 years), SCHD annualized +11.45% vs +6.49% for XLB. Past performance does not guarantee future results.
Which is riskier, SCHD or XLB?
XLB has been the more volatile fund at 20.7% annualized versus 13.6% for SCHD. Worst drawdown: SCHD -33.4% vs XLB -60.7%.
Should I hold both SCHD and XLB?
SCHD and XLB have a monthly-return correlation of 0.85, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SCHD and XLB?
SCHD and XLB share 0 common holdings with a 0.0% weight overlap. Combined, they hold 127 unique securities.
Which pays a higher dividend, SCHD or XLB?
SCHD yields 3.31% while XLB yields 1.67%, so SCHD currently pays the higher dividend yield.
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