SPHD vs SCHD: High-Yield vs Quality Dividend
SPHD screens for high yield and low volatility; SCHD screens for dividend quality and growth. The resulting portfolios are very different, and so are the long-term outcomes.
SPHD has the higher yield (~4-5%) but persistent underperformance on total return vs SCHD. Monthly distributions vs SCHD's quarterly. SPHD's high-yield-plus-low-vol screen often catches declining business (yield traps), while SCHD's quality screen filters them out. SCHD wins on nearly every metric except headline yield and payment frequency.
Quick stats
| Metric | SPHD | SCHD |
|---|---|---|
| Price | $50.13 | $31.05 |
| TTM yield | 4.26% | 3.40% |
| Real yield (NAV-adj.) | 4.62% | 4.22% |
| NAV change (period) | 8.5% | 24.1% |
| Annualized volatility | 1165.9% | 1181.1% |
| Distribution frequency | monthly | quarterly |
| Expense ratio | 0.30% | 0.06% |
| Inception | 2012-10-18 | 2011-10-20 |
| AUM | ~$3B | ~$70B |
| 1Y dividend CAGR | 17.3% | -32.1% |
| 3Y dividend CAGR | 4.3% | 7.0% |
| 5Y dividend CAGR | 1.0% | 9.2% |
| 5Y price CAGR | 2.8% | 4.5% |
Strategy & holdings
SPHD tracks the S&P 500 Low Volatility High Dividend Index — it takes the 75 highest-yielding S&P 500 stocks, then keeps the 50 with the lowest trailing 12-month volatility. SCHD uses a quality screen (cash flow, ROE, dividend growth) with a 10-year dividend history requirement. SPHD's screen is backward-looking on yield and volatility; SCHD's screen is forward-looking on sustainability.
50 S&P 500 stocks selected by highest yield then lowest trailing volatility. Heavy utilities, REITs, consumer staples exposure. Monthly distributions.
~100 quality-screened dividend payers, 10-year dividend history required. No sector concentration cap. Quarterly distributions.
SPHD's fundamental problem: 'high yield' and 'low volatility' often correlate with 'declining business.' A utility with a 5% yield that never grows isn't actually low-risk — it's exposed to regulatory risk, rate risk, and zero capital appreciation. SPHD's construction systematically buys these stocks. SCHD's quality screen explicitly filters for cash flow and ROE — which kicks out the same yield traps SPHD buys. The historical total return difference is substantial — SCHD has outperformed SPHD by several percentage points annualized over 5Y+ windows, even though SPHD typically has the slightly higher yield.
Yield & distributions
SPHD yields roughly 4-5%, SCHD typically 3.5-4%. SPHD pays monthly which many income investors prefer. But SPHD's dividend growth has been meaningfully slower than SCHD's over every rolling window — the high-yield screen biases toward stocks whose payouts are stable rather than growing. On a forward view, SCHD's 10-year dividend income projection beats SPHD's despite the lower current yield.
Total return & NAV
SCHD has substantially outperformed SPHD on total return over 3Y, 5Y, and 10Y windows. The gap is often 3-5 percentage points annualized, which compounds into major differences. SPHD's total return has been weighed down by its tilt toward utilities and REITs, which have been weak during rising-rate environments. SPHD also got hit harder than SCHD in 2022 because its rate-sensitive holdings took a double hit from both tightening and multiple compression.
Risk & volatility
Ironically, SPHD — the 'low volatility' fund — has not had meaningfully lower drawdowns than SCHD. The low-vol screen works on trailing data, so it catches historical winners that may have current headwinds. SCHD's quality screen has produced better drawdown behavior in practice despite not explicitly targeting low volatility. SPHD's sector concentration (utilities, REITs, staples) also creates correlated exposure to rates, which isn't 'low risk' in a tightening cycle.
Tax treatment
Both pay almost entirely qualified dividends, taxed at long-term capital gains rates. Tax treatment is essentially identical. SPHD's monthly distributions mean the tax impact is spread over 12 events per year vs SCHD's four — a minor administrative difference but no actual tax difference.