SCHD vs VYM Comparison Calculator

For long-term income growth, SCHD has historically outperformed VYM. With a dividend growth rate of approximately 11.44% over the past 5 years compared to VYM's 8.21%, SCHD has demonstrated a stronger commitment to growing its dividend payments over time.

This higher growth rate means that while SCHD and VYM may start with different current yields, SCHD is likely to provide more income over a long time horizon due to its faster-growing dividend payments. For investors with a time horizon of 10+ years who prioritize growing income, SCHD typically offers better potential.

VYM offers significantly broader diversification than SCHD. VYM holds over 400 stocks across various sectors, while SCHD holds approximately 100 stocks with more concentration in its top holdings.

This difference in diversification means that VYM may offer more stability during market turbulence, as its performance isn't as dependent on a smaller group of companies. However, SCHD's more focused approach on quality dividend growers has historically provided stronger dividend growth and competitive total returns despite its more concentrated portfolio.

Both SCHD and VYM primarily distribute qualified dividends, which are taxed at lower capital gains rates rather than as ordinary income. For most investors, this means a tax rate of 0%, 15%, or 20% depending on your income bracket, rather than higher ordinary income tax rates.

SCHD has historically had 100% of its dividends qualify for this preferential tax treatment, while VYM typically has a very high percentage (generally 90%+) qualify. This makes both ETFs relatively tax-efficient choices for taxable accounts, though SCHD may have a slight edge in tax efficiency.

Since SCHD's inception in 2011, it has slightly outperformed VYM in terms of total return. As of 2025, SCHD has delivered a since-inception average annual return of approximately 11.69%, compared to VYM's 11.28% over the same period.

SCHD has particularly outperformed in terms of dividend growth, with a 5-year dividend growth rate of 11.44% compared to VYM's 8.21%. This performance difference varies across different market cycles, with SCHD generally performing better during bull markets and economic expansions, while VYM has sometimes provided better downside protection during market corrections.

Yes, holding both SCHD and VYM can be a viable strategy for dividend investors seeking a balance between growth and diversification. While there is some overlap between the two ETFs' holdings, they have different selection methodologies and concentration levels that can complement each other.

A combined approach might allocate a larger percentage to SCHD for its stronger dividend growth characteristics, while maintaining a smaller position in VYM for broader market exposure and slightly higher initial yield. This strategy can provide both strong dividend growth potential and broader diversification than holding either ETF alone.

SCHD has a slightly lower expense ratio at 0.06% compared to VYM's 0.08%. While this difference is small, it means that for every $10,000 invested, you'd pay approximately $6 annually in fees for SCHD versus $8 for VYM.

Over longer time periods with larger investment amounts, this difference in expenses can compound. However, both ETFs feature very low expense ratios compared to actively managed funds and many other ETFs, making them both cost-effective options for dividend investors.