In the five years to September 2026, SCHD returned 9.5% a year and VYM returned 11.6%, dividends reinvested. Both hold US companies that pay higher-than-average dividends. SCHD picks a hundred of them using quality and dividend-growth tests; VYM holds a much broader list of high payers, weighted by size.
For a representative saver about twenty years from retirement, investing in a taxable account: On known costs alone, SCHD and VYM come out about even here. VYM's 24.3-point lead in the plan's success rate comes from how the two funds performed over the last five years, so it holds only if those years repeat.
With only the known costs — the same market for both funds, differing by fees and dividend tax — the money lasted in 82.9% of 10,000 simulated futures with SCHD and 84.4% with VYM. Using each fund's own returns from October 2021 to September 2026 instead, the figures were 69.0% and 93.3%. Both funds were run against the identical sequence of market shocks.
How many companies, and how chosen. SCHD screens on cash flow, return on equity, yield and dividend growth, which leaves a concentrated portfolio. VYM takes a broad cut of high-dividend companies and weights them by size, so its largest holdings look more like the broad market’s.
Yield and tax. SCHD has paid a higher dividend, and in a taxable account more of its return is taxed each year. In an IRA or 401(k) that difference disappears.
SCHD tracks the Dow Jones U.S. Dividend 100 Index — it screens for ten years of dividend payments, then ranks on cash flow to debt, return on equity, yield and dividend growth. VYM tracks the FTSE High Dividend Yield Index — it holds US companies forecast to pay above-average dividends, weighted by size, excluding REITs.
SCHD charges 0.06% a year and yields 3.24%; VYM charges 0.04% and yields 2.37%.
Returns and volatility are measured from monthly returns with dividends reinvested over 60 months — one sample from one market, and weak evidence for telling two broad funds apart, which is why the known-cost result is reported first. Dividends are taxed at 15% in a taxable account by default, the qualified rate most households pay; the page also shows the 0% and 20% brackets. It is the only tax modeled. A 3.8% net investment income tax can also apply to dividends once modified adjusted gross income passes $200,000 ($250,000 joint); it is not included. Retirement spending is held at 70% of income in today's dollars, and contributions exclude any employer match.
The difference you can count on is small: fees are close, and SCHD’s higher yield costs a little more tax in a taxable account. Any larger gap comes from which fund’s last five years you expect to repeat.
Its index leaves out real estate investment trusts. REIT dividends are mostly taxed as ordinary income rather than at the lower qualified rate.