# SCHD vs VYM vs VHYD: which ETF for UAE residents?

Source page: https://www.rudowealth.com/etf/compare/schd-vs-vym-vs-vhyd

SCHD holds 100 US companies chosen for steady dividends and sound finances, VYM holds US companies with above-average dividend yields, and VHYD holds high-dividend companies around the world. For an investor living in the UAE, how US dividends are taxed matters more here than for most funds.

## In short

- Different indices: SCHD tracks the Dow Jones U.S. Dividend 100; VYM tracks the FTSE High Dividend Yield; VHYD tracks the FTSE All-World High Dividend Yield.
- Cost: lowest VYM at 0.04% a year, highest VHYD at 0.29% a year.
- Tax on US dividends for a UAE resident: SCHD and VYM usually have 30% withheld; VHYD, domiciled in Ireland, pays 15% inside the fund under the US and Ireland treaty.
- US estate tax: SCHD and VYM count as US assets, taxable above US$60,000 at rates up to 40% for a person who is not a US citizen or resident; VHYD is generally not treated as a US asset.

Facts, not a recommendation. Tax depends on your nationality, residence and facts.

| ETF | Name | Domicile | Index | Dividends | Expense ratio | Listing |
|---|---|---|---|---|---|---|
| SCHD | Schwab U.S. Dividend Equity ETF | United States | Dow Jones U.S. Dividend 100 | Paid out quarterly | 0.06% | NYSE Arca, US dollars |
| VYM | Vanguard High Dividend Yield ETF | United States | FTSE High Dividend Yield | Paid out quarterly | 0.04% | NYSE Arca, US dollars |
| VHYD | Vanguard FTSE All-World High Dividend Yield UCITS ETF (USD, Dist) | Ireland (UCITS) | FTSE All-World High Dividend Yield | Paid out quarterly | 0.29% | London, US dollars |

Returns in US dollars (3 years and longer annualised):

| ETF | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| SCHD | +24.68% | +15.63% | +8.93% | +12.49% |
| VYM | +13.33% | +18.06% | +11.09% | +11.35% |

What differs for an investor living in the UAE:
- US estate tax: a US-domiciled ETF counts as a US asset. For a person who is not a US citizen or resident, US estate tax can apply above US$60,000 of US assets, at rates that rise to 40%. Ireland-domiciled UCITS ETFs are generally not treated as US assets for this tax.
- Tax on US dividends: the UAE has no income tax treaty with the United States, so US dividends paid to a UAE resident usually have 30% withheld. An Irish UCITS fund pays 15% on the US dividends it receives, under the US and Ireland treaty.
- The outcome depends on your nationality, residence and facts, so confirm your own position with a tax adviser. Sources: IRS (https://www.irs.gov/individuals/international-taxpayers/some-nonresidents-with-us-assets-must-file-estate-tax-returns; https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z).

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RuDo Wealth is a fee-only cross-border advisory operating through two separate companies. India: RuDo Wealth Investment Advisory, SEBI Registered Investment Adviser, registration INA000019503. UAE: RuDo Digital Wealth, FSRA Financial Services Permission 220155, Category 3C (Retail), ADGM. The entity permitted to serve you depends on your country of residence.

General information, not a recommendation to buy or sell any fund. Past performance does not indicate future returns.