QUAL vs. SCHD

Last updated Jul 30, 2026

QUAL (iShares MSCI USA Quality Factor ETF) and SCHD (Schwab U.S. Dividend Equity ETF) are both exchange-traded funds - QUAL is a Quality Factor fund tracking the MSCI USA Sector Neutral Quality Index, while SCHD is a Dividend fund tracking the Dow Jones U.S. Dividend 100 Index. Both are passively managed. Over the past 10 years, QUAL returned 13.92%/yr vs 12.77%/yr for SCHD. Their 0.79 correlation means they have sometimes moved together and sometimes differently. QUAL charges 0.15%/yr vs 0.06%/yr for SCHD.

Performance

QUAL vs. SCHD - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares MSCI USA Quality Factor ETF (QUAL) and Schwab U.S. Dividend Equity ETF (SCHD). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, QUAL achieves a 9.17% return, which is significantly lower than SCHD's 25.36% return. Over the past 10 years, QUAL has outperformed SCHD with an annualized return of 13.92%, while SCHD has yielded a comparatively lower 12.77% annualized return.

QUAL

• 1D: -1.14%
• 1M: -0.60%
• 6M: 6.15%
• YTD: 9.17%
• 1Y: 17.20%
• 3Y*: 16.80%
• 5Y*: 10.77%
• 10Y*: 13.92%
• ALL TIME*: 13.54%

SCHD

• 1D: -0.18%
• 1M: 5.95%
• 6M: 17.36%
• YTD: 25.36%
• 1Y: 29.09%
• 3Y*: 14.44%
• 5Y*: 9.77%
• 10Y*: 12.77%
• ALL TIME*: 13.48%

*Multi-year figures are annualized to reflect compound growth (CAGR)

Liquidity Comparison

Position	Avg. Volume Value (2W)	Avg. Volume Value (1M)	Avg. Volume Value (3M)
QUAL iShares MSCI USA Quality Factor ETF	$201.28M	$249.94M	$381.51M
SCHD Schwab U.S. Dividend Equity ETF	$736.65M	$680.04M	$674.23M

QUAL vs. SCHD - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
QUAL iShares MSCI USA Quality Factor ETF	9.17%	12.65%	22.29%	30.88%	-20.50%	26.94%	17.04%	33.89%	-5.70%	22.26%
SCHD Schwab U.S. Dividend Equity ETF	25.36%	4.34%	11.66%	4.54%	-3.26%	29.87%	15.03%	27.29%	-5.56%	20.85%

Correlation

The correlation between QUAL and SCHD is 0.39, which is low. Their historical price movements had little consistent relationship.

	Correlation
Correlation (1Y) Focuses on recent behavior, but can change the most.	0.39
Correlation (3Y) Balances recent behavior with more history.	0.55
Correlation (5Y) Shows whether the relationship held over a longer period.	0.69
Correlation (10Y) Provides a long-term view across more market conditions.	0.76
Correlation (All Time) Calculated using the full available price history since Jul 18, 2013	0.79

Over the past year, the correlation between QUAL and SCHD has dropped to 0.39 - well below their long-term average of 0.79, suggesting their price drivers have been diverging.

QUAL vs. SCHD - Sectors Allocation Comparison

Sectors	QUAL	SCHD
Technology	40.2%	12.7%
Financial Services	10.9%	9.9%
Communication Services	10.3%	6.2%
Healthcare	9.2%	20.8%
Consumer Cyclical	9.0%	7.7%
Industrials	7.4%	7.8%
Consumer Defensive	4.3%	20.6%
Energy	2.9%	14.1%
Utilities	2.1%	0.1%
Basic Materials	1.9%	1.2%
Real Estate	1.7%	-

Return for Risk

QUAL vs. SCHD — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

QUAL

QUAL Risk / Return Rank: 60
QUAL Sharpe Ratio Rank: 60
QUAL Sortino Ratio Rank: 60
QUAL Omega Ratio Rank: 57
QUAL Calmar Ratio Rank: 54
QUAL Martin Ratio Rank: 70

SCHD

SCHD Risk / Return Rank: 94
SCHD Sharpe Ratio Rank: 94
SCHD Sortino Ratio Rank: 95
SCHD Omega Ratio Rank: 93
SCHD Calmar Ratio Rank: 96
SCHD Martin Ratio Rank: 92

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

QUAL vs. SCHD - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares MSCI USA Quality Factor ETF (QUAL) and Schwab U.S. Dividend Equity ETF (SCHD). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	QUAL	SCHD	Difference
Sharpe ratio: Return per unit of total volatility	1.41	2.63	-1.22
Sortino ratio: Return per unit of downside risk	2.03	4.07	-2.03
Omega ratio: Gain probability vs. loss probability	1.25	1.47	-0.22
Calmar ratio: Return relative to maximum drawdown	1.91	6.33	-4.42
Martin ratio: Return relative to average drawdown	8.55	15.97	-7.42

QUAL vs. SCHD - Sharpe Ratio Comparison

The current QUAL Sharpe Ratio is 1.41, which is lower than the SCHD Sharpe Ratio of 2.63. The chart below compares the historical Sharpe Ratios of QUAL and SCHD, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

QUAL vs. SCHD - Drawdown Comparison

The maximum QUAL drawdown since its inception was -34.06%, roughly equal to the maximum SCHD drawdown of -33.37%. Use the drawdown chart below to compare losses from any high point for QUAL and SCHD.

Drawdown Indicators

	QUAL	SCHD	Difference
Max Drawdown Largest peak-to-trough decline	-34.06%	-33.37%	-0.69%
Max Drawdown (1Y) Largest decline over 1 year	-9.03%	-4.61%	-4.42%
Max Drawdown (3Y) Largest decline over 3 years	-18.00%	-16.13%	-1.87%
Max Drawdown (5Y) Largest decline over 5 years	-28.23%	-16.85%	-11.38%
Max Drawdown (10Y) Largest decline over 10 years	-34.06%	-33.37%	-0.69%
Current Drawdown Current decline from peak	-2.12%	-0.18%	-1.94%
Average Drawdown Average peak-to-trough decline	-4.07%	-3.30%	-0.77%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.02%	1.85%	+0.17%

Volatility

QUAL vs. SCHD - Volatility Comparison

The current volatility for iShares MSCI USA Quality Factor ETF (QUAL) is 2.72%, while Schwab U.S. Dividend Equity ETF (SCHD) has a volatility of 3.93%. This indicates that QUAL experiences smaller price fluctuations and is considered to be less risky than SCHD based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	QUAL	SCHD	Difference
Volatility (1M) Calculated over the trailing 1-month period	2.72%	3.93%	-1.21%
Volatility (6M) Calculated over the trailing 6-month period	9.64%	8.00%	+1.64%
Volatility (1Y) Calculated over the trailing 1-year period	12.28%	11.13%	+1.15%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.38%	14.38%	+3.00%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	18.09%	16.72%	+1.37%

QUAL vs. SCHD - Expense Ratio Comparison

QUAL has a 0.15% expense ratio, which is higher than SCHD's 0.06% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

QUAL vs. SCHD - Dividend Comparison

QUAL's dividend yield for the trailing twelve months is around 0.87%, less than SCHD's 3.10% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
QUAL iShares MSCI USA Quality Factor ETF	0.87%	0.94%	1.02%	1.23%	1.59%	1.20%	1.39%	1.60%	2.00%	1.76%	1.96%	1.63%
SCHD Schwab U.S. Dividend Equity ETF	3.10%	3.82%	3.64%	3.49%	3.39%	2.78%	3.16%	2.98%	3.06%	2.63%	2.89%	2.97%

Frequently Asked Questions

Can I hold both QUAL and SCHD in my portfolio?

QUAL and SCHD have a correlation of 0.39, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, QUAL or SCHD?

SCHD has higher volatility (3.93%) compared to QUAL (2.72%). In terms of maximum drawdown, QUAL dropped -34.06% vs SCHD's -33.37%.

Which ETF is better, QUAL or SCHD?

On 10-year performance, QUAL leads with 13.92% vs 12.77% for SCHD. On fees, SCHD is cheaper at 0.06% per year. On volatility, QUAL has been the lower-risk option at 2.72%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, QUAL or SCHD?

Over the 10-year period, QUAL has performed better with a 13.92% return vs 12.77%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, QUAL or SCHD?

SCHD is cheaper with a 0.06% expense ratio, compared with 0.15% for QUAL.

Which ETF pays a higher dividend yield, QUAL or SCHD?

SCHD has the higher dividend yield at 3.10%, compared with 0.87% for QUAL.

What is the main difference between QUAL and SCHD?

QUAL is categorized as Quality Factor, while SCHD is Dividend. QUAL tracks MSCI USA Sector Neutral Quality Index, while SCHD tracks Dow Jones U.S. Dividend 100 Index. They also come from different issuers: iShares and Charles Schwab. Their fees differ too: 0.15% for QUAL and 0.06% for SCHD.

Which has better risk-adjusted returns?

SCHD currently has the higher Sharpe Ratio (2.63 vs 1.41), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.