SCHD vs XLY
Schwab US Dividend Equity ETF vs State Street Consumer Discretionary 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 | XLY | Winner |
|---|---|---|---|
| Expense Ratio | 0.06% | 0.08% | |
| AUM | $103.7B | $21.5B | |
| Dividend Yield | 3.31% | 0.77% | |
| Holdings | 104 | 51 | |
| YTD Return | +26.21% | +0.49% | |
| 1Y Return | +29.99% | +3.87% | |
| 3Y Return (annualized) | +15.73% | +12.57% | |
| 5Y Return (annualized) | +9.67% | +6.34% | |
| Volatility (annualized) | 13.6% | 19.2% | |
| Max Drawdown | -33.4% | -60.1% | |
| Fund Family | Charles Schwab Asset Management | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Oct 20, 2011 | Dec 16, 1998 |
SCHD vs XLY Performance
Schwab US Dividend Equity ETF (SCHD) is a ETF from Charles Schwab Asset Management and State Street Consumer Discretionary Select Sector SPDR ETF (XLY) is a ETF from SPDR State Street Global Advisors. Over the past year SCHD returned +29.99% while XLY returned +3.87%. Year to date, SCHD is up 26.21% versus a gain of 0.49% for XLY.
Over three years, SCHD compounded at +15.73% per year against +12.57% for XLY; over five years the annualized figures are +9.67% and +6.34% respectively. Across the full 15-year window we track, SCHD has the edge at +11.50% annualized vs +8.58%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLY has been the more volatile fund, with annualized monthly volatility of 19.2% 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 -60.1% for XLY. 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 0.69. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
SCHD charges 0.06% per year while XLY 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 0.77% for XLY.
Holdings Overlap
SCHD and XLY share 4 holdings out of 144 unique holdings combined, representing a 6.5% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, SCHD or XLY?
SCHD has an expense ratio of 0.06% while XLY 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 XLY?
Over the past year SCHD returned +29.99% vs +3.87% for XLY, so SCHD leads on 1-year performance. Over the longest common window we track (15 years), SCHD annualized +11.50% vs +8.58% for XLY. Past performance does not guarantee future results.
Which is riskier, SCHD or XLY?
XLY has been the more volatile fund at 19.2% annualized versus 13.6% for SCHD. Worst drawdown: SCHD -33.4% vs XLY -60.1%.
Should I hold both SCHD and XLY?
SCHD and XLY have a monthly-return correlation of 0.69, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SCHD and XLY?
SCHD and XLY share 4 common holdings with a 6.5% weight overlap. Combined, they hold 144 unique securities.
Which pays a higher dividend, SCHD or XLY?
SCHD yields 3.31% while XLY yields 0.77%, so SCHD currently pays the higher dividend yield.
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