SCHD vs VYM: which dividend ETF is better?
SCHD and VYM are two of the most popular dividend funds. Both pay more than the average stock fund. They pick their companies in different ways.
Key points
- SCHD holds about 100 companies picked for strong finances and steady dividends.
- VYM holds hundreds of companies that pay above-average dividends.
- Both charge 0.06% a year. SCHD has paid a higher yield lately.
Quick comparison
| SCHD | VYM | |
|---|---|---|
| Made by | Schwab | Vanguard |
| Number of companies | About 100 | Hundreds |
| Yearly fee | 0.06% | 0.06% |
| Dividend yield (approx.) | 3.7% | 2.8% |
| 10-year yearly return (approx.) | 11.0% | 10.5% |
Returns and yields are rounded estimates through mid-2026. They change over time.
How they pick companies
SCHD looks for companies that have paid dividends for at least 10 years in a row. Then it picks about 100 with strong cash flow, good returns and solid dividend growth. It's choosy.
VYM takes a wider approach. It buys most large U.S. companies that pay higher-than-average dividends. That means more companies, so each one matters less.
Income and growth example
Say you invest $500 a month for 25 years at each fund's approximate past rate:
| Fund | Balance after 25 years | Yearly dividends |
|---|---|---|
| SCHD (11%, 3.7% yield) | $720,438 | $26,656 |
| VYM (10.5%, 2.8% yield) | $666,384 | $18,659 |
With these past numbers, SCHD comes out ahead on both growth and income. But past returns don't promise future ones. The two funds have taken turns leading in different years.
Which one fits you?
- Pick SCHD if you want a higher yield and like a focused list of quality companies.
- Pick VYM if you want more companies and less weight on any single one.
- Own one, not both, unless you have a reason. They overlap a lot.
Things to know about dividend funds
- They usually hold less tech, so they can lag when tech is booming.
- Dividends can be cut in hard times.
- In a regular brokerage account, dividends are taxed each year.
Many people use dividend funds closer to retirement. See our guide on switching from growth to dividends.
Put SCHD and VYM head to head with your own numbers.
Compare fundsQuick answers
Is SCHD better than VYM?
SCHD has paid a higher yield and slightly higher returns over the last 10 years. VYM is more spread out. Neither is always better.
Do SCHD and VYM pay monthly?
No. Both usually pay dividends four times a year.
Should I own both SCHD and VYM?
Most people pick one. They hold many of the same kinds of companies, so owning both adds little variety.
Are dividend ETFs good for retirement?
Many retirees like them because they pay steady cash. But they usually grow slower than broad or growth funds, and dividends can be cut.
Sources
Keep learning
This article is for learning only. It is not financial, tax or legal advice. Example returns are not promises. Talk to a licensed professional about your own situation.