VIG vs SCHD Overlap: Two Dividend Strategies With Different Goals
VIG requires 10+ years of consecutive dividend growth. SCHD screens for quality, payout sustainability, and current yield. Both are excellent dividend ETFs — they are not the same fund.
What the VIG and SCHD Overlap Means
VIG (Vanguard Dividend Appreciation ETF) and SCHD (Schwab US Dividend Equity ETF) are both dividend funds, but they select stocks differently and produce different income profiles. VIG tracks the S&P U.S. Dividend Growers Index: any company that has increased its dividend for at least 10 consecutive years qualifies, provided it is not a REIT. This screen includes Apple and Microsoft — both have decade-long dividend growth streaks, even if their current yield is low (under 1%). VIG holds roughly 330 stocks.
SCHD screens more aggressively for current yield. A company with a 10-year growth streak but a 0.5% yield will not make SCHD's cut — the fund requires meaningful yield alongside quality metrics (cash flow to debt, return on equity). The result is a higher-yielding, more value-tilted portfolio of about 100 stocks.
These funds are genuinely complementary rather than redundant. VIG gives you dividend growth from high-quality companies, including some that are growth-oriented by nature. SCHD gives you higher current income from established, value-tilted dividend payers. Owning both covers the dividend spectrum — growth-stage income builders (VIG) alongside higher-yield mature businesses (SCHD) — without the overlap problem of holding two nearly identical funds.
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Top-10 holdings data, updated regularly from public sources. Shared position counts reflect top-10 positions only — not full portfolio overlap. For broad market funds like VTI and VOO, true full-portfolio overlap is significantly higher than the top-10 figure. Nothing here is personalized financial advice. Full disclosures.
Frequently Asked Questions
Partially. Both hold established US dividend payers, and some names appear in both. However, VIG's 10-year consecutive growth screen brings in companies with low current yields (Apple, Microsoft) that SCHD's yield-focused screen excludes. SCHD's value tilt brings in higher-yielding financials and consumer staples that do not meet VIG's growth-streak requirement.
For current income: SCHD (3.5-3.7% yield vs VIG's 1.7-2%). For dividend growth and capital appreciation: VIG in strong markets. For downside protection: SCHD held up better in 2022. Over most 10-year periods, total return has been similar. The choice depends on whether you prioritize current income or dividend growth rate.
There is a reasonable case for it. Unlike owning two nearly identical funds, VIG and SCHD have genuinely different selection logic and portfolio compositions. VIG captures dividend growth companies (including tech); SCHD captures high-quality higher-yield companies (value-tilted). The combined portfolio spans the dividend quality spectrum more completely than either fund alone.
VIG screens for 10+ consecutive years of dividend growth regardless of current yield (0.03%). SCHD screens for dividend quality AND meaningful current yield (0.06%). VIG holds ~330 stocks including Apple and Microsoft; SCHD holds ~100 stocks with more financial and consumer staples weight. VIG is growth-oriented; SCHD is income-oriented.
SCHD has historically had a higher dividend growth rate in most years — its quality screens favor companies with sustainable, growing payout capacity. VIG's growth rate benefits from Microsoft and Apple growing their dividends, but their low starting yields mean the absolute dollar growth is smaller. Both have outpaced inflation meaningfully over 10-year periods.