The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the Schwab U.S. Dividend Equity ETF (SCHD) are both among the Top 100 ETFs. DIA is a SPDR State Street Global Advisors Large Value fund and SCHD is a Schwab ETFs Large Value fund. So, what’s the difference between DIA and SCHD? And which fund is better?
The expense ratio of DIA is 0.10 percentage points higher than SCHD’s (0.16% vs. 0.06%). DIA also has a lower exposure to the financial services sector and a higher standard deviation. Overall, DIA has provided lower returns than SCHD over the past 8 years.
In this article, we’ll compare DIA vs. SCHD. We’ll look at fund composition and portfolio growth, as well as at their industry exposure and risk metrics. Moreover, I’ll also discuss DIA’s and SCHD’s holdings, annual returns, and performance and examine how these affect their overall returns.
Summary
| DIA | SCHD | |
| Name | SPDR Dow Jones Industrial Average ETF Trust | Schwab U.S. Dividend Equity ETF |
| Category | Large Value | Large Value |
| Issuer | SPDR State Street Global Advisors | Schwab ETFs |
| AUM | 30.46B | 26B |
| Avg. Return | 13.35% | 14.80% |
| Div. Yield | 1.61% | 2.89% |
| Expense Ratio | 0.16% | 0.06% |
The SPDR Dow Jones Industrial Average ETF Trust (DIA) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 30.46B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.61% with an expense ratio of 0.16%.
The Schwab U.S. Dividend Equity ETF (SCHD) is a Large Value fund that is issued by Schwab ETFs. It currently has 26B total assets under management and has yielded an average annual return of 14.80% over the past 10 years. The fund has a dividend yield of 2.89% with an expense ratio of 0.06%.
DIA’s dividend yield is 1.28% lower than that of SCHD (1.61% vs. 2.89%). Also, DIA yielded on average 1.45% less per year over the past decade (13.35% vs. 14.80%). The expense ratio of DIA is 0.10 percentage points higher than SCHD’s (0.16% vs. 0.06%).
Fund Composition
Industry Exposure
| DIA | SCHD | |
| Technology | 17.32% | 16.26% |
| Industrials | 16.7% | 18.05% |
| Energy | 2.0% | 1.87% |
| Communication Services | 4.42% | 4.96% |
| Utilities | 0.0% | 0.0% |
| Healthcare | 17.92% | 12.64% |
| Consumer Defensive | 6.3% | 14.04% |
| Real Estate | 0.0% | 0.0% |
| Financial Services | 20.68% | 21.69% |
| Consumer Cyclical | 13.44% | 8.36% |
| Basic Materials | 1.21% | 2.13% |
The SPDR Dow Jones Industrial Average ETF Trust (DIA) has the most exposure to the Financial Services sector at 20.68%. This is followed by Healthcare and Technology at 17.92% and 17.32% respectively. Utilities (0.0%), Basic Materials (1.21%), and Energy (2.0%) only make up 3.21% of the fund’s total assets.
DIA’s mid-section with moderate exposure is comprised of Communication Services, Consumer Defensive, Consumer Cyclical, Industrials, and Technology stocks at 4.42%, 6.3%, 13.44%, 16.7%, and 17.32%.
The Schwab U.S. Dividend Equity ETF (SCHD) has the most exposure to the Financial Services sector at 21.69%. This is followed by Industrials and Technology at 18.05% and 16.26% respectively. Utilities (0.0%), Energy (1.87%), and Basic Materials (2.13%) only make up 4.00% of the fund’s total assets.
SCHD’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Healthcare, Consumer Defensive, and Technology stocks at 4.96%, 8.36%, 12.64%, 14.04%, and 16.26%.
DIA is 1.01% less exposed to the Financial Services sector than SCHD (20.68% vs 21.69%). DIA’s exposure to Healthcare and Technology stocks is 5.28% higher and 1.06% higher respectively (17.92% vs. 12.64% and 17.32% vs. 16.26%). In total, Utilities, Basic Materials, and Energy also make up 0.79% less of the fund’s holdings compared to SCHD (3.21% vs. 4.00%).
Holdings
| DIA Holdings | Weight |
| UnitedHealth Group Inc | 7.63% |
| Goldman Sachs Group Inc | 7.23% |
| The Home Depot Inc | 6.07% |
| Microsoft Corp | 5.16% |
| Salesforce.com Inc | 4.65% |
| Amgen Inc | 4.64% |
| Boeing Co | 4.56% |
| Visa Inc Class A | 4.45% |
| McDonald’s Corp | 4.4% |
| Honeywell International Inc | 4.18% |
DIA’s Top Holdings are UnitedHealth Group Inc, Goldman Sachs Group Inc, The Home Depot Inc, Microsoft Corp, and Salesforce.com Inc at 7.63%, 7.23%, 6.07%, 5.16%, and 4.65%.
Amgen Inc (4.64%), Boeing Co (4.56%), and Visa Inc Class A (4.45%) have a slightly smaller but still significant weight. McDonald’s Corp and Honeywell International Inc are also represented in the DIA’s holdings at 4.4% and 4.18%.
| SCHD Holdings | Weight |
| Merck & Co Inc | 4.24% |
| The Home Depot Inc | 4.19% |
| Texas Instruments Inc | 4.16% |
| Broadcom Inc | 4.15% |
| Amgen Inc | 4.11% |
| PepsiCo Inc | 4.09% |
| BlackRock Inc | 4.05% |
| Pfizer Inc | 3.97% |
| Verizon Communications Inc | 3.96% |
| Cisco Systems Inc | 3.96% |
SCHD’s Top Holdings are Merck & Co Inc, The Home Depot Inc, Texas Instruments Inc, Broadcom Inc, and Amgen Inc at 4.24%, 4.19%, 4.16%, 4.15%, and 4.11%.
PepsiCo Inc (4.09%), BlackRock Inc (4.05%), and Pfizer Inc (3.97%) have a slightly smaller but still significant weight. Verizon Communications Inc and Cisco Systems Inc are also represented in the SCHD’s holdings at 3.96% and 3.96%.
Risk Analysis
| DIA | SCHD | |
| Mean Return | 1.13 | 0 |
| R-squared | 93.31 | 0 |
| Std. Deviation | 13.68 | 0 |
| Alpha | -0.94 | 0 |
| Beta | 0.97 | 0 |
| Sharpe Ratio | 0.94 | 0 |
| Treynor Ratio | 13.07 | 0 |
The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a Sharpe Ratio of 0.94 with a R-squared of 93.31 and a Mean Return of 1.13. Its Standard Deviation is 13.68 while DIA’s Alpha is -0.94. Furthermore, the fund has a Beta of 0.97 and a Treynor Ratio of 13.07.
The Schwab U.S. Dividend Equity ETF (SCHD) has a Mean Return of 0 with a Treynor Ratio of 0 and a R-squared of 0. Its Alpha is 0 while SCHD’s Standard Deviation is 0. Furthermore, the fund has a Beta of 0 and a Sharpe Ratio of 0.
DIA’s Mean Return is 1.13 points higher than that of SCHD and its R-squared is 93.31 points higher. With a Standard Deviation of 13.68, DIA is slightly more volatile than SCHD. The Alpha and Beta of DIA are 0.94 points lower and 0.97 points higher than SCHD’s Alpha and Beta.
Performance
Annual Returns
| Year | DIA | SCHD |
| 2020 | 9.63% | 15.11% |
| 2019 | 25.09% | 27.28% |
| 2018 | -3.6% | -5.46% |
| 2017 | 27.97% | 20.88% |
| 2016 | 16.28% | 16.25% |
| 2015 | 0.1% | -0.21% |
| 2014 | 9.88% | 11.66% |
| 2013 | 29.41% | 32.9% |
| 2012 | 10.04% | 11.4% |
| 2011 | 8.21% | 0.0% |
| 2010 | 13.87% | 0.0% |
DIA had its best year in 2013 with an annual return of 29.41%. DIA’s worst year over the past decade yielded -3.6% and occurred in 2018. In most years the SPDR Dow Jones Industrial Average ETF Trust provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 9.88%, 10.04%, and 13.87% respectively.
The year 2013 was the strongest year for SCHD, returning 32.9% on an annual basis. The poorest year for SCHD in the last ten years was 2018, with a yield of -5.46%. Most years the Schwab U.S. Dividend Equity ETF has given investors modest returns, such as in 2012, 2014, and 2020, when gains were 11.4%, 11.66%, and 15.11% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| DIA | $10,000 | $28,000 | 13.35% |
| SCHD | $10,000 | $28,823 | 14.80% |
A $10,000 investment in DIA would have resulted in a final balance of $28,000. This is a profit of $18,000 over 8 years and amounts to a compound annual growth rate (CAGR) of 13.35%.
With a $10,000 investment in SCHD, the end total would have been $28,823. This equates to a $18,823 profit over 8 years and a compound annual growth rate (CAGR) of 14.80%.
DIA’s CAGR is 1.45 percentage points lower than that of SCHD and as a result, would have yielded $823 less on a $10,000 investment. Thus, DIA performed worse than SCHD by 1.45% annually.
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