IWM vs SCHD: Correlation & Overlap
Measured on weekly returns over the past three years, iShares Russell 2000 ETF (IWM) and Schwab US Dividend Equity ETF (SCHD) carry a correlation of 0.74, a strong link. By holdings, the two funds overlap 1.5% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IWM and SCHD?
Over the past 3 years, IWM and SCHD moved with a correlation of 0.74, which is strong. Lately the two have drifted apart, with the 1-year correlation at 0.42 versus 0.74 over 3 years. Over 5 years the correlation is 0.79, and the annualized covariance of weekly returns is 188.7 %².
By 3-year correlation, SCHD places #26 of the 320 assets tracked against IWM. Twelve-month performance is nearly a tie, at +28.4% for IWM and +29.6% for SCHD. Across three years, the rolling one-year figure varied moderately, from 0.47 to 0.87. Note the risk asymmetry: IWM runs 1.5 times the annualized volatility of the other leg, so equal-weighting the two is not an equal-risk position.
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
IWM vs SCHD: side by side
| IWM (iShares Russell 2000 ETF) | SCHD (Schwab US Dividend Equity ETF) | |
|---|---|---|
| 1-year return | +28.4% | +29.6% |
| 5-year return | +41.5% | +60.9% |
| Volatility (ann.) | 19.8% | 12.9% |
| Beta vs S&P 500 | 1.06 | 0.52 |
| Max drawdown (3Y) | -27.5% | -16.1% |
| Dividend yield | 0.91% | 3.13% |
| Expense ratio | 0.19% | 0.06% |
| Assets under management | $80.1B | $104.2B |
| Sector / category | ETF · US Small & Mid Cap | ETF · Dividend |
IWM, iShares's Small Blend fund, carries $80.1B under management, 1757 holdings, a 0.19% expense ratio, a 0.91% trailing dividend yield. SCHD, Schwab ETFs's Large Value fund, carries $104.2B under management, 101 holdings, a 0.06% expense ratio, a 3.13% trailing dividend yield.
Portfolio overlap between IWM and SCHD
The two portfolios are largely distinct: 1.5% of the funds' weight sits in the same underlying holdings (33 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in IWM | Weight in SCHD |
|---|---|---|
| MC | 0.12% | 0.12% |
| MUR | 0.15% | 0.11% |
| KFY | 0.14% | 0.11% |
| CVBF | 0.12% | 0.09% |
| APAM | 0.09% | 0.07% |
| BANR | 0.07% | 0.06% |
| CNS | 0.08% | 0.06% |
| MZTI | 0.07% | 0.06% |
| OFG | 0.07% | 0.05% |
| IPAR | 0.07% | 0.05% |
| AGM | 0.07% | 0.05% |
| CHCO | 0.06% | 0.05% |
| NSP | 0.06% | 0.05% |
| GABC | 0.06% | 0.05% |
| NBHC | 0.06% | 0.05% |
Largest positions held only by IWM: MOGA (0.35%), UMBF (0.34%), CYTK (0.33%), GKOS (0.33%), EAT (0.33%). Only by SCHD: MRK (4.92%), ABT (4.83%), AMGN (4.80%), KO (4.22%), VZ (3.97%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 15 common positions shown.
Year-by-year returns
| Year | IWM | SCHD |
|---|---|---|
| 2022 | -20.5% | -3.3% |
| 2023 | +16.8% | +4.5% |
| 2024 | +11.4% | +11.7% |
| 2025 | +12.7% | +4.3% |
| 2026 | +22.3% | +29.1% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IWM and SCHD good diversifiers for each other?
Only partially. A correlation of 0.74 means IWM and SCHD share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between IWM and SCHD?
The IWM/SCHD correlation stands at 0.74 on a 3-year window (1 year: 0.42, 5 years: 0.79), computed from weekly returns as of 2026-08-27.
Is SCHD a good diversifier for IWM?
Only partially. A correlation of 0.74 means IWM and SCHD share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do IWM and SCHD overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 1.5% by weight over 33 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/iwm-vs-schd.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/iwm-vs-schd/)
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Related comparisons
Hubs: IWM correlations · SCHD correlations
