MBSD vs SCHD
MBSD vs SCHD
FlexShares Disciplined Duration MBS Index Fund vs Schwab US Dividend Equity ETF
Quick Verdict
SCHD has a lower expense ratio. SCHD delivered stronger 1-year returns. MBSD offers more diversification with 462 holdings.
Side-by-Side Comparison
| Metric | MBSD | SCHD | Winner |
|---|---|---|---|
| Expense Ratio | 0.20% | 0.06% | |
| AUM | $89M | $103.7B | |
| Dividend Yield | 4.19% | 3.31% | |
| Holdings | 482 | 104 | |
| YTD Return | +0.12% | +24.08% | |
| 1Y Return | +2.89% | +31.88% | |
| 3Y Return (annualized) | +4.37% | +14.92% | |
| 5Y Return (annualized) | +0.47% | +9.85% | |
| Volatility (annualized) | 3.5% | 13.6% | |
| Max Drawdown | -18.0% | -33.4% | |
| Fund Family | Flexshares Trust | Charles Schwab Asset Management | |
| Category | Fixed Income | Equity | |
| Inception | Sep 3, 2014 | Oct 20, 2011 |
MBSD vs SCHD Performance
FlexShares Disciplined Duration MBS Index Fund (MBSD) is a ETF from Flexshares Trust and Schwab US Dividend Equity ETF (SCHD) is a ETF from Charles Schwab Asset Management. Over the past year MBSD returned +2.89% while SCHD returned +31.88%. Year to date, MBSD is up 0.12% versus a gain of 24.08% for SCHD.
Over three years, MBSD compounded at +4.37% per year against +14.92% for SCHD; over five years the annualized figures are +0.47% and +9.85% respectively. Across the full 12-year window we track, SCHD has the edge at +11.39% annualized vs -0.09%. 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 3.5% for MBSD. 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 -18.0% for MBSD 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 0.35. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
MBSD charges 0.20% per year while SCHD charges 0.06%. On a $10,000 position that is $20 vs $6 annually, a gap of $14 per year that compounds over a long holding period. On income, MBSD currently yields 4.19% against 3.31% for SCHD.
Holdings Overlap
MBSD and SCHD share 0 holdings out of 562 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, MBSD or SCHD?
MBSD has an expense ratio of 0.20% while SCHD charges 0.06%. SCHD is the cheaper option. On a $10,000 investment, that is $14 per year of difference.
Which performed better, MBSD or SCHD?
Over the past year MBSD returned +2.89% vs +31.88% for SCHD, so SCHD leads on 1-year performance. Over the longest common window we track (12 years), MBSD annualized -0.09% vs +11.39% for SCHD. Past performance does not guarantee future results.
Which is riskier, MBSD or SCHD?
SCHD has been the more volatile fund at 13.6% annualized versus 3.5% for MBSD. Worst drawdown: MBSD -18.0% vs SCHD -33.4%.
Should I hold both MBSD and SCHD?
MBSD and SCHD have a monthly-return correlation of 0.35, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MBSD and SCHD?
MBSD and SCHD share 0 common holdings with a 0.0% weight overlap. Combined, they hold 562 unique securities.
Which pays a higher dividend, MBSD or SCHD?
MBSD yields 4.19% while SCHD yields 3.31%, so MBSD currently pays the higher dividend yield.
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