SCHM vs. XLF

Last updated Jun 12, 2026

SCHM (Schwab US Mid-Cap ETF) and XLF (State Street Financial Select Sector SPDR ETF) are both exchange-traded funds - SCHM is a Mid Cap Blend Equities fund tracking the Dow Jones US Total Stock Market Mid-Cap, while XLF is a Financials Equities fund tracking the Financial Select Sector Index. Both are passively managed. Over the past 10 years, SCHM returned 11.48%/yr vs 13.01%/yr for XLF. A 0.80 correlation means they provide meaningful diversification when combined. SCHM charges 0.04%/yr vs 0.08%/yr for XLF.

Performance

SCHM vs. XLF - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Schwab US Mid-Cap ETF (SCHM) and State Street Financial Select Sector SPDR ETF (XLF). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, SCHM achieves a 18.78% return, which is significantly higher than XLF's -3.43% return. Over the past 10 years, SCHM has underperformed XLF with an annualized return of 11.48%, while XLF has yielded a comparatively higher 13.01% annualized return.

SCHM

• 1D: 2.98%
• 1M: 3.25%
• YTD: 18.78%
• 6M: 15.85%
• 1Y: 31.34%
• 3Y*: 17.28%
• 5Y*: 7.82%
• 10Y*: 11.48%

XLF

• 1D: 0.75%
• 1M: 2.02%
• YTD: -3.43%
• 6M: -3.27%
• 1Y: 4.77%
• 3Y*: 18.56%
• 5Y*: 8.86%
• 10Y*: 13.01%

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

SCHM vs. XLF - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
SCHM Schwab US Mid-Cap ETF	18.78%	10.17%	11.98%	16.69%	-17.07%	19.36%	15.26%	27.48%	-8.77%	19.60%
XLF State Street Financial Select Sector SPDR ETF	-3.43%	14.90%	30.56%	12.03%	-10.59%	34.80%	-1.74%	31.88%	-13.06%	22.00%

Correlation

The correlation between SCHM and XLF is 0.63, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.63
Correlation (3Y) Calculated over the trailing 3-year period	0.72
Correlation (5Y) Calculated over the trailing 5-year period	0.78
Correlation (10Y) Calculated over the trailing 10-year period	0.77
Correlation (All Time) Calculated using the full available price history since Jan 13, 2011	0.80

The correlation between SCHM and XLF shifts across timeframes, from 0.63 (1 year) to 0.80 (all time), reflecting how their relationship changes across market environments.

SCHM vs. XLF - Sectors Allocation Comparison

Sectors	SCHM	XLF
Technology	22.5%	1.8%
Industrials	21.6%	0.2%
Healthcare	11.1%	-
Financial Services	10.9%	98.0%
Consumer Cyclical	9.7%	-
Real Estate	6.5%	-
Basic Materials	4.9%	-
Consumer Defensive	3.6%	-
Energy	3.6%	-
Utilities	3.0%	-
Communication Services	2.5%	-

Return for Risk

SCHM vs. XLF — Risk / Return Rank

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

SCHM

SCHM Risk / Return Rank: 75
SCHM Sharpe Ratio Rank: 73
SCHM Sortino Ratio Rank: 74
SCHM Omega Ratio Rank: 70
SCHM Calmar Ratio Rank: 78
SCHM Martin Ratio Rank: 82

XLF

XLF Risk / Return Rank: 15
XLF Sharpe Ratio Rank: 16
XLF Sortino Ratio Rank: 15
XLF Omega Ratio Rank: 15
XLF Calmar Ratio Rank: 14
XLF Martin Ratio Rank: 14

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.

SCHM vs. XLF - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Schwab US Mid-Cap ETF (SCHM) and State Street Financial Select Sector SPDR ETF (XLF). 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.

	SCHM	XLF	Difference
Sharpe ratio: Return per unit of total volatility	1.95	0.33	+1.62
Sortino ratio: Return per unit of downside risk	2.75	0.54	+2.21
Omega ratio: Gain probability vs. loss probability	1.34	1.07	+0.27
Calmar ratio: Return relative to maximum drawdown	3.38	0.32	+3.06
Martin ratio: Return relative to average drawdown	13.51	0.83	+12.68

SCHM vs. XLF - Sharpe Ratio Comparison

The current SCHM Sharpe Ratio is 1.95, which is higher than the XLF Sharpe Ratio of 0.33. The chart below compares the historical Sharpe Ratios of SCHM and XLF, 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

SCHM vs. XLF - Drawdown Comparison

The maximum SCHM drawdown since its inception was -42.43%, smaller than the maximum XLF drawdown of -82.69%. Use the drawdown chart below to compare losses from any high point for SCHM and XLF.

Drawdown Indicators

	SCHM	XLF	Difference
Max Drawdown Largest peak-to-trough decline	-42.43%	-82.69%	+40.26%
Max Drawdown (1Y) Largest decline over 1 year	-9.32%	-14.79%	+5.47%
Max Drawdown (3Y) Largest decline over 3 years	-23.27%	-15.54%	-7.73%
Max Drawdown (5Y) Largest decline over 5 years	-26.46%	-25.81%	-0.65%
Max Drawdown (10Y) Largest decline over 10 years	-42.43%	-42.86%	+0.43%
Current Drawdown Current decline from peak	-0.39%	-6.22%	+5.83%
Average Drawdown Average peak-to-trough decline	-5.65%	-20.01%	+14.36%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.33%	5.75%	-3.42%

Volatility

SCHM vs. XLF - Volatility Comparison

Schwab US Mid-Cap ETF (SCHM) has a higher volatility of 5.59% compared to State Street Financial Select Sector SPDR ETF (XLF) at 4.26%. This indicates that SCHM's price experiences larger fluctuations and is considered to be riskier than XLF based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	SCHM	XLF	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.59%	4.26%	+1.33%
Volatility (6M) Calculated over the trailing 6-month period	12.45%	11.24%	+1.21%
Volatility (1Y) Calculated over the trailing 1-year period	16.14%	14.63%	+1.51%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	19.65%	18.65%	+1.00%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	20.50%	22.17%	-1.67%

SCHM vs. XLF - Expense Ratio Comparison

SCHM has a 0.04% expense ratio, which is lower than XLF's 0.08% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

SCHM vs. XLF - Dividend Comparison

SCHM's dividend yield for the trailing twelve months is around 1.22%, less than XLF's 1.51% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
SCHM Schwab US Mid-Cap ETF	1.22%	1.46%	1.43%	1.50%	1.67%	1.13%	1.31%	1.48%	1.56%	1.27%	1.51%	1.54%
XLF State Street Financial Select Sector SPDR ETF	1.51%	1.31%	1.42%	1.71%	2.04%	1.63%	2.03%	1.87%	2.08%	1.48%	21.10%	1.95%

Frequently Asked Questions

Can I hold both SCHM and XLF in my portfolio?

SCHM and XLF have a correlation of 0.63, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, SCHM or XLF?

SCHM has higher volatility (5.59%) compared to XLF (4.26%). In terms of maximum drawdown, SCHM dropped -42.43% vs XLF's -82.69%.

Which ETF is better, SCHM or XLF?

On 10-year performance, XLF leads with 13.01% vs 11.48% for SCHM. On fees, SCHM is cheaper at 0.04% per year. On volatility, XLF has been the lower-risk option at 4.26%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, SCHM or XLF?

Over the 10-year period, XLF has performed better with a 13.01% return vs 11.48%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, SCHM or XLF?

SCHM is cheaper with a 0.04% expense ratio, compared with 0.08% for XLF.

Which ETF pays a higher dividend yield, SCHM or XLF?

XLF has the higher dividend yield at 1.51%, compared with 1.22% for SCHM.

What is the main difference between SCHM and XLF?

SCHM is categorized as Mid Cap Blend Equities, while XLF is Financials Equities. SCHM tracks Dow Jones US Total Stock Market Mid-Cap, while XLF tracks Financial Select Sector Index. They also come from different issuers: Charles Schwab and State Street. Their fees differ too: 0.04% for SCHM and 0.08% for XLF.

Which has better risk-adjusted returns?

SCHM currently has the higher Sharpe Ratio (1.95 vs 0.33), 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.