In this battle of ETFs, Schwab U.S. Dividend Equity ETF (SCHD 0.48%) offers a higher distribution yield and a more concentrated portfolio compared to the broader, lower-cost Vanguard High Dividend Yield ETF (VYM 0.14%).
Dividend-focused investors often narrow their search to these two heavyweights. Both funds target established, dividend-paying U.S. companies, but they differ in how they screen for quality, how they weight their positions, and how much they charge for the privilege.
Snapshot (cost & size)
| Metric | VYM | SCHD |
|---|---|---|
| Issuer | Vanguard | Schwab |
| Expense ratio | 0.04% | 0.06% |
| 1-yr return (as of June 8, 2026) | 24.3% | 26.3% |
| Dividend yield | 2.2% | 3.2% |
| Beta | 0.73 | 0.67 |
| AUM | $94.6 billion | $95.3 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
With a 0.06% expense ratio, SCHD is competitively priced, though it sits 2 basis points above VYM at 0.04%. For income seekers, the Schwab fund compensates with a 3.2% distribution yield, notably higher than the 2.2% offered by its Vanguard peer.
Performance & risk comparison
| Metric | VYM | SCHD |
|---|---|---|
| Max drawdown (5 yr) | (15.8%) | (16.8%) |
| Growth of $1,000 over 5 years (total return) | $1,710 | $1,503 |
Schwab U.S. Dividend Equity ETF focuses on quality and sustainability, tracking the Dow Jones U.S. Dividend 100 Index. It holds 103 stocks, making it much more concentrated than its peer. Its sector exposure tilts toward technology at 19%, with consumer defensive and healthcare both at 18%. Top holdings include Qualcomm (QCOM 0.19%) at 5.85%, Texas Instruments (TXN 1.87%) at 5.55%, and UnitedHealth Group (UNH +2.66%) at 5.40%. Stalwart stocks like Coca-Cola (KO 4.29%), Merck (MRK 0.10%), and Verizon Communications (VZ 1.00%) are also among its top 10 positions, and no single holding exceeds 6% of the portfolio. Launched in 2011, the fund has a trailing-12-month dividend payout of $1.06 per share.
Vanguard High Dividend Yield ETF casts a wider net with more than 600 holdings. It favors financial services at 20%, followed by technology at 18% and healthcare at 12%. Its largest positions include Broadcom (AVGO +0.23%) at 8.03%, JPMorgan Chase (JPM +0.11%) at 3.35%, and ExxonMobil (XOM +1.44%) at 2.72%. Household names like Bank of America (BAC 0.13%), Johnson & Johnson (JNJ +1.05%), and Procter & Gamble (PG 1.06%) are also among its top 10. The Vanguard fund was launched in 2006 and has paid $3.51 per share in dividends over the trailing 12 months.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
The Vanguard and Schwab ETFs share many similarities, with comparable assets under management, expense ratios, and recent returns. SCHD is considerably more concentrated, but contains many blue chip names. Vanguard’s ETF offers far more diversification, boasting over 600 equities. While VYM’s payout is greater on a dollar basis, its yield is lower, meaning if $1,000 were invested in each fund, Schwab’s ETF would ultimately generate more annual income.
Investors primarily interested in the dividend yield would probably prefer to opt for SCHD. However, VYM's diversification shouldn't be discounted; the ETF's performance is spread out over hundreds of stocks, reducing your overall risk (but also your overall potential return). Given dividend-paying stocks tend to be more stable in general, investors with a long-term time horizon would likely feel comfortable owning shares of either ETF, though SCHD’s yield is clearly more attractive.
