SCHD vs VYM: Dividend/Income Calculator Comparison

Which one fits whom

On the funds' trailing asOf 2026-06 figures, SCHD starts with the higher distribution yield (~3.3% vs ~2.5%) and the faster dividend-per-share growth anchor (~7% vs ~6.0%), so in the projection above it tends to lead VYM on both current income and yield-on-cost across the horizon, while the two track closely on portfolio value because they share the same illustrative price-growth assumption. That does not make SCHD the correct choice for everyone: those are backward-looking inputs, not guarantees, and VYM buys something the calculator cannot score — roughly four times as many holdings and a lighter single-name concentration. Someone who wants the larger, faster-growing payout on the historical record leans SCHD; someone who prioritises breadth, lower turnover, and the slightly lower 0.04% expense ratio leans VYM. Many long-horizon investors hold both. Neither is a yield-versus-safety trade the way a covered-call fund would be — both are plain qualified-dividend index funds.

SCHD vs VYM: what actually separates them

Yield and dividend growth

This pairing is unusual because it is not the familiar yield-versus-growth fork. SCHD carries both the higher starting yield and the faster trailing dividend growth, so on the sourced inputs there is no crossover year — SCHD's income line simply sits above VYM's from the start and the gap widens as the faster-growing per-share dividend compounds. The reason traces to construction. SCHD tracks the Dow Jones U.S. Dividend 100, a roughly 100-stock screen that first requires ten consecutive years of dividends and then ranks survivors on cash-flow-to-debt, return on equity, yield, and five-year dividend growth. VYM tracks the FTSE High Dividend Yield Index, a far broader set of 400-plus U.S. names selected mainly by forecast yield and market-cap weighted. VYM's breadth buys diversification; SCHD's tighter quality-and-growth screen is what has produced the higher trailing per-share growth the model projects forward. The two also sit differently under the hood: SCHD applies sector caps and rebalances its 100 names once a year, which concentrates the portfolio into a smaller, more actively screened set, while VYM's market-cap weighting across 400-plus names leans it toward the largest high-yield financials, healthcare, and consumer-staples payers and turns over less. That is the trade the calculator cannot price — a single missed dividend or reconstitution matters more in SCHD's narrower book than in VYM's. Change the growth assumptions in your own view and the ordering can change — the calculator makes that assumption visible rather than burying it in a single yield number.

Tax treatment — qualified for both

Here the two funds are genuinely alike, which is worth stating plainly rather than manufacturing a difference. Both distribute almost entirely qualified dividends, taxed at the 0/15/20% long-term capital-gains rates in a taxable account rather than at ordinary marginal rates. That is the opposite of a covered-call income fund, whose option-premium distributions are taxed as ordinary income up to 37%. So the account toggle moves both projections the same way: in a taxable account each year's qualified-dividend tax is subtracted before the DRIP reinvests, and inside an IRA or Roth both compound untaxed. The small nuance is that VYM's qualified fraction is a touch below SCHD's, but the after-tax gap between the two is driven far more by SCHD's larger pre-tax distribution than by any difference in tax character.

NAV erosion and total return

Neither SCHD nor VYM finances its dividend out of principal, so neither carries the structural NAV erosion that drags a high covered-call yield — the erosion column reads — for both, and the yield you see is earned, not returned capital. That is the honest headline of this comparison: because both share the same illustrative price-growth assumption net of expense, their base-scenario portfolio values run nearly parallel, and the total-return difference is dominated by the income side, where SCHD's larger, faster-growing distribution reinvests into more shares. The figures above are illustrative projections of the funds' current yield, trailing dividend growth, and expense ratios asOf 2026-06, not forecasts; forward growth and price return are editorial preset assumptions. For the fund-by-fund detail behind each side, see the individual calculators below.