SCHD vs XLF
Schwab US Dividend Equity ETF vs State Street Financial 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 | XLF | Winner |
|---|---|---|---|
| Expense Ratio | 0.06% | 0.08% | |
| AUM | $103.7B | $56.2B | |
| Dividend Yield | 3.31% | 1.51% | |
| Holdings | 104 | 80 | |
| YTD Return | +25.33% | +6.16% | |
| 1Y Return | +32.31% | +13.27% | |
| 3Y Return (annualized) | +15.40% | +20.20% | |
| 5Y Return (annualized) | +9.70% | +10.45% | |
| Volatility (annualized) | 13.6% | 21.4% | |
| Max Drawdown | -33.4% | -83.8% | |
| Fund Family | Charles Schwab Asset Management | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Oct 20, 2011 | Dec 16, 1998 |
SCHD vs XLF Performance
Schwab US Dividend Equity ETF (SCHD) is a ETF from Charles Schwab Asset Management and State Street Financial Select Sector SPDR ETF (XLF) is a ETF from SPDR State Street Global Advisors. Over the past year SCHD returned +32.31% while XLF returned +13.27%. Year to date, SCHD is up 25.33% versus a gain of 6.16% for XLF.
Over three years, SCHD compounded at +15.40% per year against +20.20% for XLF; over five years the annualized figures are +9.70% and +10.45% respectively. Across the full 15-year window we track, SCHD has the edge at +11.45% annualized vs +3.70%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLF has been the more volatile fund, with annualized monthly volatility of 21.4% 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 -83.8% for XLF. 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 0.77. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
SCHD charges 0.06% per year while XLF 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 1.51% for XLF.
Holdings Overlap
SCHD and XLF share 8 holdings out of 169 unique holdings combined, representing a 3.5% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, SCHD or XLF?
SCHD has an expense ratio of 0.06% while XLF 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 XLF?
Over the past year SCHD returned +32.31% vs +13.27% for XLF, so SCHD leads on 1-year performance. Over the longest common window we track (15 years), SCHD annualized +11.45% vs +3.70% for XLF. Past performance does not guarantee future results.
Which is riskier, SCHD or XLF?
XLF has been the more volatile fund at 21.4% annualized versus 13.6% for SCHD. Worst drawdown: SCHD -33.4% vs XLF -83.8%.
Should I hold both SCHD and XLF?
SCHD and XLF have a monthly-return correlation of 0.77, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SCHD and XLF?
SCHD and XLF share 8 common holdings with a 3.5% weight overlap. Combined, they hold 169 unique securities.
Which pays a higher dividend, SCHD or XLF?
SCHD yields 3.31% while XLF yields 1.51%, so SCHD currently pays the higher dividend yield.
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