HYI vs SCHD
HYI vs SCHD
Western Asset High Yield Defined Opportunity Fund Inc. vs Schwab US Dividend Equity ETF
Quick Verdict
SCHD has a lower expense ratio. SCHD delivered stronger 1-year returns. HYI offers more diversification with 191 holdings.
Side-by-Side Comparison
| Metric | HYI | SCHD | Winner |
|---|---|---|---|
| Expense Ratio | 0.96% | 0.06% | |
| AUM | $146M | $103.7B | |
| Dividend Yield | 9.89% | 3.31% | |
| Holdings | 258 | 104 | |
| YTD Return | +0.25% | +23.53% | |
| 1Y Return | -2.25% | +30.95% | |
| 3Y Return (annualized) | +6.05% | +14.72% | |
| 5Y Return (annualized) | +1.32% | +9.56% | |
| Volatility (annualized) | 12.4% | 13.6% | |
| Max Drawdown | -48.5% | -33.4% | |
| Fund Family | Franklin Templeton Investments (US) | Charles Schwab Asset Management | |
| Category | Fixed Income | Equity | |
| Inception | Oct 27, 2010 | Oct 20, 2011 |
HYI vs SCHD Performance
Western Asset High Yield Defined Opportunity Fund Inc. (HYI) is a ETF from Franklin Templeton Investments (US) and Schwab US Dividend Equity ETF (SCHD) is a ETF from Charles Schwab Asset Management. Over the past year HYI returned -2.25% while SCHD returned +30.95%. Year to date, HYI is up 0.25% versus a gain of 23.53% for SCHD.
Over three years, HYI compounded at +6.05% per year against +14.72% for SCHD; over five years the annualized figures are +1.32% and +9.56% respectively. Across the full 15-year window we track, SCHD has the edge at +11.35% annualized vs -0.86%. 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 12.4% for HYI. 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 -48.5% for HYI 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 0.62. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
HYI charges 0.96% per year while SCHD charges 0.06%. On a $10,000 position that is $96 vs $6 annually, a gap of $90 per year that compounds over a long holding period. On income, HYI currently yields 9.89% against 3.31% for SCHD.
Holdings Overlap
HYI and SCHD share 0 holdings out of 291 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, HYI or SCHD?
HYI has an expense ratio of 0.96% while SCHD charges 0.06%. SCHD is the cheaper option. On a $10,000 investment, that is $90 per year of difference.
Which performed better, HYI or SCHD?
Over the past year HYI returned -2.25% vs +30.95% for SCHD, so SCHD leads on 1-year performance. Over the longest common window we track (15 years), HYI annualized -0.86% vs +11.35% for SCHD. Past performance does not guarantee future results.
Which is riskier, HYI or SCHD?
SCHD has been the more volatile fund at 13.6% annualized versus 12.4% for HYI. Worst drawdown: HYI -48.5% vs SCHD -33.4%.
Should I hold both HYI and SCHD?
HYI and SCHD have a monthly-return correlation of 0.62, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between HYI and SCHD?
HYI and SCHD share 0 common holdings with a 0.0% weight overlap. Combined, they hold 291 unique securities.
Which pays a higher dividend, HYI or SCHD?
HYI yields 9.89% while SCHD yields 3.31%, so HYI currently pays the higher dividend yield.
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