HYG vs SCHD
HYG vs SCHD
iShares iBoxx $ High Yield Corporate Bond ETF vs Schwab US Dividend Equity ETF
Quick Verdict
SCHD has a lower expense ratio. SCHD delivered stronger 1-year returns. HYG offers more diversification with 1089 holdings.
Side-by-Side Comparison
| Metric | HYG | SCHD | Winner |
|---|---|---|---|
| Expense Ratio | 0.49% | 0.06% | |
| AUM | $15.9B | $103.7B | |
| Dividend Yield | 5.90% | 3.31% | |
| Holdings | 1,331 | 104 | |
| YTD Return | +1.54% | +23.31% | |
| 1Y Return | +4.59% | +30.42% | |
| 3Y Return (annualized) | +8.12% | +14.66% | |
| 5Y Return (annualized) | +3.64% | +9.59% | |
| Volatility (annualized) | 10.0% | 13.6% | |
| Max Drawdown | -41.9% | -33.4% | |
| Fund Family | iShares by BlackRock (US) | Charles Schwab Asset Management | |
| Category | Fixed Income | Equity | |
| Inception | Apr 4, 2007 | Oct 20, 2011 |
HYG vs SCHD Performance
iShares iBoxx $ High Yield Corporate Bond ETF (HYG) is a ETF from iShares by BlackRock (US) and Schwab US Dividend Equity ETF (SCHD) is a ETF from Charles Schwab Asset Management. Over the past year HYG returned +4.59% while SCHD returned +30.42%. Year to date, HYG is up 1.54% versus a gain of 23.31% for SCHD.
Over three years, HYG compounded at +8.12% per year against +14.66% for SCHD; over five years the annualized figures are +3.64% and +9.59% respectively. Across the full 15-year window we track, SCHD has the edge at +11.34% annualized vs +0.12%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SCHD has been the more volatile fund, with annualized monthly volatility of 13.6% compared with 10.0% for HYG. 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 -41.9% for HYG and -33.4% for SCHD. 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 0.70. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
HYG charges 0.49% per year while SCHD charges 0.06%. On a $10,000 position that is $49 vs $6 annually, a gap of $43 per year that compounds over a long holding period. On income, HYG currently yields 5.90% against 3.31% for SCHD.
Holdings Overlap
HYG and SCHD share 0 holdings out of 1189 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, HYG or SCHD?
HYG has an expense ratio of 0.49% while SCHD charges 0.06%. SCHD is the cheaper option. On a $10,000 investment, that is $43 per year of difference.
Which performed better, HYG or SCHD?
Over the past year HYG returned +4.59% vs +30.42% for SCHD, so SCHD leads on 1-year performance. Over the longest common window we track (15 years), HYG annualized +0.12% vs +11.34% for SCHD. Past performance does not guarantee future results.
Which is riskier, HYG or SCHD?
SCHD has been the more volatile fund at 13.6% annualized versus 10.0% for HYG. Worst drawdown: HYG -41.9% vs SCHD -33.4%.
Should I hold both HYG and SCHD?
HYG and SCHD have a monthly-return correlation of 0.70, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between HYG and SCHD?
HYG and SCHD share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1189 unique securities.
Which pays a higher dividend, HYG or SCHD?
HYG yields 5.90% while SCHD yields 3.31%, so HYG currently pays the higher dividend yield.
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