Schwab vs. Vanguard: Which Dividend ETF Offers a Juicier Yield?
Key Points
SCHD offers a significantly higher TTM yield of 3.2% compared to the 2.2% provided by VYM.
VYM maintains a slightly lower expense ratio of 0.04% and provides broader diversification through more than 600 individual holdings.
While the Schwab fund led in one-year performance, Vanguard's ETF has produced a higher total return over the past five years.
- 10 stocks we like better than Schwab U.S. Dividend Equity ETF ›
In this battle of ETFs, Schwab U.S. Dividend Equity ETF (NYSEMKT:SCHD) offers a higher distribution yield and a more concentrated portfolio compared to the broader, lower-cost Vanguard High Dividend Yield ETF (NYSEMKT:VYM).
Dividend-focused investors often narrow their search to these two heavyweights. Both funds target established, dividend-paying U.S. companies, but they differ in how they screen for quality, how they weight their positions, and how much they charge for the privilege.
Snapshot (cost & size)
| Metric | VYM | SCHD |
|---|---|---|
| Issuer | Vanguard | Schwab |
| Expense ratio | 0.04% | 0.06% |
| 1-yr return (as of June 8, 2026) | 24.3% | 26.3% |
| Dividend yield | 2.2% | 3.2% |
| Beta | 0.73 | 0.67 |
| AUM | $94.6 billion | $95.3 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
With a 0.06% expense ratio, SCHD is competitively priced, though it sits 2 basis points above VYM at 0.04%. For income seekers, the Schwab fund compensates with a 3.2% distribution yield, notably higher than the 2.2% offered by its Vanguard peer.
Performance & risk comparison
| Metric | VYM | SCHD |
|---|---|---|
| Max drawdown (5 yr) | (15.8%) | (16.8%) |
| Growth of $1,000 over 5 years (total return) | $1,710 | $1,503 |
Schwab U.S. Dividend Equity ETF focuses on quality and sustainability, tracking the Dow Jones U.S. Dividend 100 Index. It holds 103 stocks, making it much more concentrated than its peer. Its sector exposure tilts toward technology at 19%, with consumer defensive and healthcare both at 18%. Top holdings include Qualcomm (NASDAQ:QCOM) at 5.85%, Texas Instruments (NASDAQ:TXN) at 5.55%, and UnitedHealth Group (NYSE:UNH) at 5.40%. Stalwart stocks like Coca-Cola (NYSE:KO), Merck (NYSE:MRK), and Verizon Communications (NYSE:VZ) are also among its top 10 positions, and no single holding exceeds 6% of the portfolio. Launched in 2011, the fund has a trailing-12-month dividend payout of $1.06 per share.
Vanguard High Dividend Yield ETF casts a wider net with more than 600 holdings. It favors financial services at 20%, followed by technology at 18% and healthcare at 12%. Its largest positions include Broadcom (NASDAQ:AVGO) at 8.03%, JPMorgan Chase (NYSE:JPM) at 3.35%, and ExxonMobil (NYSE:XOM) at 2.72%. Household names like Bank of America (NYSE:BAC), Johnson & Johnson (NYSE:JNJ), and Procter & Gamble (NYSE:PG) are also among its top 10. The Vanguard fund was launched in 2006 and has paid $3.51 per share in dividends over the trailing 12 months.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
The Vanguard and Schwab ETFs share many similarities, with comparable assets under management, expense ratios, and recent returns. SCHD is considerably more concentrated, but contains many blue chip names. Vanguard’s ETF offers far more diversification, boasting over 600 equities. While VYM’s payout is greater on a dollar basis, its yield is lower, meaning if $1,000 were invested in each fund, Schwab’s ETF would ultimately generate more annual income.
Investors primarily interested in the dividend yield would probably prefer to opt for SCHD. However, VYM's diversification shouldn't be discounted; the ETF's performance is spread out over hundreds of stocks, reducing your overall risk (but also your overall potential return). Given dividend-paying stocks tend to be more stable in general, investors with a long-term time horizon would likely feel comfortable owning shares of either ETF, though SCHD’s yield is clearly more attractive.
Should you buy stock in Schwab U.S. Dividend Equity ETF right now?
Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $439,038!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,277,804!*
Now, it’s worth noting Stock Advisor’s total average return is 942% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of June 10, 2026.
JPMorgan Chase is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Erin Kennedy has positions in Schwab U.S. Equity Dividend ETF. The Motley Fool has positions in and recommends Broadcom, JPMorgan Chase, Merck, Qualcomm, Texas Instruments, and Vanguard High Dividend Yield ETF. The Motley Fool recommends Johnson & Johnson, UnitedHealth Group, and Verizon Communications. The Motley Fool has a disclosure policy.
Recommended Articles
