🤝 BFF Take
VOO Wins on Total Return. SCHD Wins on Current Income. Know Your Goal.
This comparison comes down to one question: do you need income now, or are you building wealth for later? VOO tracks the S&P 500 at 0.03%, reinvesting dividends and compounding at the full market rate. Over any 10-year rolling period, total-return investors in VOO have outpaced SCHD on a dollar basis. SCHD tracks the Dow Jones US Dividend 100 Index, selecting 100 companies screened for dividend quality, payout ratio, and five-year dividend growth at 0.06%. Its current yield of around 3.5% makes it genuinely useful for investors who need cash distributions from their portfolio. The mistake is choosing SCHD over VOO purely for the higher yield without needing the income. If you are in accumulation mode and reinvesting dividends, VOO's broader market exposure and lower cost produce more wealth. If you are living off your portfolio, SCHD's 3.5% yield means less forced selling. Many investors in their 50s and 60s hold both.
📋 Quick Takeaways
💸VOO costs 0.03% ($3/yr per $10K). SCHD costs 0.06% ($6/yr per $10K). Both are cheap. This is a strategy call, not a cost call.
📈VOO: 503 S&P 500 stocks, total market return. SCHD: 100 quality dividend payers, concentrated and screened.
🎯Building wealth? VOO. Need income from your portfolio now? SCHD. Retired with a spending need? Consider both.
📊 Data-Based Take: VOO has the lower fee
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
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Reviewed by a CFA® Charterholder · Data updated Jun 2026 · Educational only, not financial advice
SCHD
Schwab US Dividend Equity ETF
📋 SCHD vs VOO — Key Facts Side by Side
| Metric |
SCHD |
VOO |
| Fund Name |
Schwab US Dividend Equity ETF |
Vanguard S&P 500 ETF |
| Issuer |
Schwab |
Vanguard |
| Tracks Index |
Dow Jones US Dividend 100 |
S&P 500 |
| Expense Ratio |
0.06% |
0.03% ✓ |
| Cost per $10K/yr |
$6.00 |
$3.00 |
| AUM |
$65B |
$600B |
| Holdings |
100 |
503 |
| Inception |
2011 |
2010 |
| 1-Year Return |
+10.50% |
+26.50% |
| 3-Year Return |
+7.20% |
+10.20% |
| 5-Year Return |
+11.80% |
+15.90% |
| Avg Bid-Ask Spread |
0.00% |
0.00% |
Data from ETF BFF database. Returns are annualised. Not investment advice.
📊 SCHD vs VOO — Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Should You Buy SCHD or VOO?
Choose if...
SCHD
- You want regular dividend income from quality dividend payers
- You already use Schwab and prefer staying within their fund family
Choose if...
VOO
- You want the lowest fees — saves ~$3/yr per $10K vs SCHD
- You want broader diversification (503 holdings vs 100)
- You want focused large-cap US stock exposure via S&P 500
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❓ SCHD vs VOO — Frequently Asked Questions
Does SCHD outperform VOO?
VOO has outperformed SCHD on total return over most long periods because the S&P 500 includes the fastest-growing companies regardless of dividend policy. SCHD's quality screen excludes high-growth stocks that pay no dividends. Nvidia, Amazon, and Google have all been excluded at various points. On a total-return basis with dividends reinvested, VOO has delivered roughly 15-16% annualized over five years versus SCHD's 10-12%. SCHD's advantage is current income yield of around 3.5%, not capital growth.
Why do people choose SCHD over VOO?
Investors choose SCHD when they need current income from their portfolio. Retirees drawing down savings, income-focused investors, and those in taxable accounts who prefer qualified dividend income over capital gains may favor SCHD's 3.5% yield. SCHD also applies a quality screen: the 100 stocks it holds have been filtered for dividend consistency, coverage ratio, and financial health, which provides some downside protection during stress periods.
Can I hold both SCHD and VOO?
Yes. Many investors hold both: a VOO core for total return growth with a SCHD sleeve for income. A common allocation in the years approaching retirement is to gradually shift weight from VOO toward SCHD as the need for distributions increases. One caution: SCHD and VOO have significant overlap in sectors like financials, healthcare, and consumer staples. Holding both does not add much diversification. You are shifting from a total-return tilt to an income tilt.
Is SCHD safe during market crashes?
SCHD's quality screen filters for dividend consistency and financial strength, which has historically provided mild downside protection. In 2022, SCHD declined roughly 3.2% while VOO fell about 18%, largely because its dividend-quality screen kept it away from high-multiple growth stocks. In a deep recession, however, SCHD is still an equity fund and will fall with the market, just with somewhat less volatility than the broad S&P 500.
New to ETF investing? See answers to the most common ETF questions →
ℹ️ Data shown is for educational purposes and may not reflect the most current figures. Returns are trailing price-based and exclude dividend reinvestment. Past performance does not guarantee future results. ETF BFF is not a licensed financial advisor — this is not personalized financial advice.