SCHD vs XLK
Schwab US Dividend Equity ETF vs State Street Technology Select Sector SPDR ETF
Quick Verdict
SCHD has a lower expense ratio. XLK delivered stronger 1-year returns. SCHD offers more diversification with 104 holdings.
Side-by-Side Comparison
| Metric | SCHD | XLK | Winner |
|---|---|---|---|
| Expense Ratio | 0.06% | 0.08% | |
| AUM | $108.7B | $124.4B | |
| Dividend Yield | 3.13% | 0.45% | |
| Holdings | 104 | 77 | |
| YTD Return | +27.67% | +27.20% | |
| 1Y Return | +31.26% | +41.67% | |
| 3Y Return (annualized) | +16.66% | +30.51% | |
| 5Y Return (annualized) | +10.18% | +19.55% | |
| Volatility (annualized) | 13.6% | 23.2% | |
| Max Drawdown | -33.4% | -82.0% | |
| Fund Family | Charles Schwab Asset Management | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Oct 20, 2011 | Dec 16, 1998 |
SCHD vs XLK Performance
Schwab US Dividend Equity ETF (SCHD) is a ETF from Charles Schwab Asset Management and State Street Technology Select Sector SPDR ETF (XLK) is a ETF from SPDR State Street Global Advisors. Over the past year SCHD returned +31.26% while XLK returned +41.67%. Year to date, SCHD is up 27.67% versus a gain of 27.20% for XLK.
Over three years, SCHD compounded at +16.66% per year against +30.51% for XLK; over five years the annualized figures are +10.18% and +19.55% respectively. Across the full 15-year window we track, SCHD has the edge at +11.57% annualized vs +9.37%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLK has been the more volatile fund, with annualized monthly volatility of 23.2% 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 -82.0% for XLK. 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 0.60. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
SCHD charges 0.06% per year while XLK 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 3.13% against 0.45% for XLK.
Holdings Overlap
SCHD and XLK share 3 holdings out of 172 unique holdings combined, representing a 3.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, SCHD or XLK?
SCHD has an expense ratio of 0.06% while XLK 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 XLK?
Over the past year SCHD returned +31.26% vs +41.67% for XLK, so XLK leads on 1-year performance. Over the longest common window we track (15 years), SCHD annualized +11.57% vs +9.37% for XLK. Past performance does not guarantee future results.
Which is riskier, SCHD or XLK?
XLK has been the more volatile fund at 23.2% annualized versus 13.6% for SCHD. Worst drawdown: SCHD -33.4% vs XLK -82.0%.
Should I hold both SCHD and XLK?
SCHD and XLK have a monthly-return correlation of 0.60, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SCHD and XLK?
SCHD and XLK share 3 common holdings with a 3.2% weight overlap. Combined, they hold 172 unique securities.
Which pays a higher dividend, SCHD or XLK?
SCHD yields 3.13% while XLK yields 0.45%, so SCHD currently pays the higher dividend yield.
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