Comparing Schwab U.S. Dividend Equity ETF (SCHD -0.75%) and Vanguard High Dividend Yield ETF (VYM -0.04%) reveals two low-cost income powerhouses with distinct approaches to portfolio concentration and yield.
Income investors often gravitate toward these two funds for their rock-bottom fees and focus on seasoned, dividend-paying companies. While both seek to provide steady cash flow, they differ in how they screen for quality and how many individual stocks they ultimately hold.
Snapshot (cost & size)
| Metric | VYM | SCHD |
|---|---|---|
| Issuer | Vanguard | Schwab |
| Share price (as of June 26, 2026) | $158.22 | $32.09 |
| Expense ratio | 0.04% | 0.06% |
| 1-yr return (as of June 26, 2026) | 22.7% | 26% |
| Dividend yield | 2.2% | 3.3% |
| Beta | 0.72 | 0.67 |
| AUM | $96.1 billion | $96.4 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.
The funds have pretty comparable expense ratios. However, Schwab’s ETF currently offers a higher payout, with a yield gap of 1.1 percentage points.
Performance & risk comparison
| Metric | VYM | SCHD |
|---|---|---|
| Max drawdown (5 yr) | (15.8%) | (16.8%) |
| Growth of $1,000 over 5 years (total return) | $1,744 | $1,524 |
What's inside
The Schwab ETF focuses on 103 holdings, creating a more concentrated portfolio than many of its peers. Its largest positions include UnitedHealth Group (UNH +2.01%) at 4.5%, Merck (MRK +0.44%) at 4.45%, and Home Depot (HD +1.12%) at 4.42%. The fund is primarily weighted toward technology (19%), consumer defensive (18%), and healthcare (18%). It was launched in 2011. The ETF has paid $1.05 per share over the trailing 12 months.
Vanguard’s fund offers broader diversification through 605 holdings. Its largest positions include Broadcom (AVGO +0.43%) at 8.52%, JPMorgan Chase (JPM +0.73%) at 3.15%, and ExxonMobil (XOM -1.42%) at 2.53%. The portfolio spans technology (20%), financial services (20%), and healthcare (12%). It was launched in 2006. The Vanguard ETF has paid $3.63 per share over the trailing 12 months.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
These two dividend specialists share some commonalities. Assets under management are almost identical, and their expense ratios are very close. (I am not going to quibble about a 2-basis-point difference.)
Where they diverge in a significant way is their number of holdings. VYM has more than 600 positions, while SCHD has 103. However, I like that none of the stocks in SCHD exceed a 5% weighting. (Admittedly, in Vanguard's ETF, only one stock goes above that threshold.)
Finally, the Schwab fund yields more and has better recent returns. Past performance is no guarantee of future results, but investors seeking income may find SCHD an appealing option.
