SCHD vs SHYG
SCHD vs SHYG
Schwab US Dividend Equity ETF vs iShares 0-5 Year High Yield Corporate Bond ETF
Quick Verdict
SCHD has a lower expense ratio. SCHD delivered stronger 1-year returns. SHYG offers more diversification with 1032 holdings.
Side-by-Side Comparison
| Metric | SCHD | SHYG | Winner |
|---|---|---|---|
| Expense Ratio | 0.06% | 0.30% | |
| AUM | $103.7B | $7.6B | |
| Dividend Yield | 3.31% | 7.00% | |
| Holdings | 104 | 1,165 | |
| YTD Return | +24.08% | +1.63% | |
| 1Y Return | +31.88% | +4.61% | |
| 3Y Return (annualized) | +14.92% | +7.68% | |
| 5Y Return (annualized) | +9.85% | +4.85% | |
| Volatility (annualized) | 13.6% | 5.5% | |
| Max Drawdown | -33.4% | -26.3% | |
| Fund Family | Charles Schwab Asset Management | iShares by BlackRock (US) | |
| Category | Equity | Fixed Income | |
| Inception | Oct 20, 2011 | Oct 15, 2013 |
SCHD vs SHYG Performance
Schwab US Dividend Equity ETF (SCHD) is a ETF from Charles Schwab Asset Management and iShares 0-5 Year High Yield Corporate Bond ETF (SHYG) is a ETF from iShares by BlackRock (US). Over the past year SCHD returned +31.88% while SHYG returned +4.61%. Year to date, SCHD is up 24.08% versus a gain of 1.63% for SHYG.
Over three years, SCHD compounded at +14.92% per year against +7.68% for SHYG; over five years the annualized figures are +9.85% and +4.85% respectively. Across the full 13-year window we track, SCHD has the edge at +11.39% annualized vs +1.36%. 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 5.5% for SHYG. 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 -33.4% for SCHD and -26.3% for SHYG. 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 0.71. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
SCHD charges 0.06% per year while SHYG charges 0.30%. On a $10,000 position that is $6 vs $30 annually, a gap of $24 per year that compounds over a long holding period. On income, SCHD currently yields 3.31% against 7.00% for SHYG.
Holdings Overlap
SCHD and SHYG share 0 holdings out of 1132 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, SCHD or SHYG?
SCHD has an expense ratio of 0.06% while SHYG charges 0.30%. SCHD is the cheaper option. On a $10,000 investment, that is $24 per year of difference.
Which performed better, SCHD or SHYG?
Over the past year SCHD returned +31.88% vs +4.61% for SHYG, so SCHD leads on 1-year performance. Over the longest common window we track (13 years), SCHD annualized +11.39% vs +1.36% for SHYG. Past performance does not guarantee future results.
Which is riskier, SCHD or SHYG?
SCHD has been the more volatile fund at 13.6% annualized versus 5.5% for SHYG. Worst drawdown: SCHD -33.4% vs SHYG -26.3%.
Should I hold both SCHD and SHYG?
SCHD and SHYG have a monthly-return correlation of 0.71, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SCHD and SHYG?
SCHD and SHYG share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1132 unique securities.
Which pays a higher dividend, SCHD or SHYG?
SCHD yields 3.31% while SHYG yields 7.00%, so SHYG currently pays the higher dividend yield.
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