SCHD vs VOO: Side-by-Side ETF Comparison

SCHD vs VOO: VOO crushed SCHD with 14.43% vs 7.80% one-year returns, but SCHD delivers 3.82% dividend yield compared to VOO's 1.13%. The choice comes down to growth exposure - VOO's 35% tech allocation versus SCHD's value tilt with 20% energy and 18% consumer defensive stocks.

Table of Content

• Annual & Cumulative Returns
• Risk Metrics
• Dividend Yield & Growth
• Fees & Liquidity
• ETF Composition: Asset Classes
• Regional Allocation
• Sector Weights
• Top 10 Holdings
• Valuation & Growth Metrics
• Which ETF Fits Your Portfolio?

ETF Issuers & Investment Objective

Schwab's SCHD takes a selective approach, targeting large U.S. companies that not only pay high dividends but have demonstrated consistent dividend payments and fundamental strength relative to peers. This value-focused strategy tilts toward established companies in energy (20.6% of holdings), consumer defensive (18.2%), and healthcare (15.5%) sectors, resulting in a substantial 3.82% dividend yield that significantly outpaces most broad market funds.

Vanguard's VOO, by contrast, simply aims to mirror the S&P 500, holding roughly 500 large U.S. companies in proportion to their index weights. This creates a tech-heavy portfolio with 35.1% in technology stocks plus significant exposure to financial services and communication sectors. The fund's 1.13% dividend yield reflects this broader mix of growth and value companies, while its 14.43% one-year return shows how this market-cap weighting captures the full momentum of large-cap stocks.

Annual & Cumulative Returns

SCHD's recent run tells a dividend story that growth charts miss. While the S&P tracker delivered 14.43% over twelve months, SCHD managed just 7.8% - yet look at 2024's opening act and the dividend screener's 6.23% YTD return nearly laps VOO's 1.07%. That divergence reveals two distinct market phases: last year's tech-heavy rally favored VOO's 35% technology weighting, while this year's rotation into value and energy (SCHD's top sector at 20.6%) shows how dividend stalwarts can sprint when sentiment shifts.

Stretch the timeline and the picture shifts again. VOO's three-year 21.51% annualized return towers over SCHD's 8.5%, but move to five years and the gap narrows to barely 4.5 percentage points. At ten years, SCHD's 12.81% compounds surprisingly close to VOO's 15.69% - proof that high-quality dividend growers weren't left behind in the longest bull run. The takeaway? These aren't good-or-bad funds; they're different tools. Growth seekers might stomach VOO's lower yield for broader exposure, while income-focused investors could find SCHD's 3.82% dividend plus respectable growth strikes their preferred balance between cash flow and capital appreciation.

Risk Metrics

SCHD's three-year Sharpe ratio of 0.2 lags VOO's 1.4 by a wide margin, meaning investors in the dividend-focused fund received far less compensation for each unit of risk they absorbed. The numbers tell a clear story: VOO delivered stronger risk-adjusted returns despite having slightly lower volatility at 11.96% versus SCHD's 12.61% over three years. Even on a one-year basis, both funds show similar volatility patterns with SCHD at 11.45% and VOO at 10.99%, essentially a wash.

The Sharpe ratio gap reflects VOO's superior performance during the measured period, not necessarily that SCHD is inherently riskier. Dividend strategies often trade some upside participation for steadier income streams, which appears to be the case here. For investors prioritizing total return efficiency, VOO's risk-reward profile looks more attractive based on recent history. Those valuing SCHD's 3.82% yield should understand they're accepting lower risk-adjusted returns, at least for now.

Dividend Yield & Growth

SCHD's 3.82% yield is more than triple VOO's 1.13%, which means an investor parking $100k would collect roughly $3,820 a year from SCHD versus $1,130 from VOO. That gap has stayed fairly wide because the Schwab fund only buys companies that already pay and reliably grow dividends, while the Vanguard product simply owns the whole S&P 500 where many names (especially the big tech positions) distribute little or nothing.

The trade-off shows up in total return: VOO's 14.43% one-year gain against SCHD's 7.80% illustrates how the market often rewards growth over yield. If you need cash flow now say you're supplementing retirement spending the higher dividend can be worth the slower price appreciation. On the other hand, investors who don't need income today and prefer to let compounding do the heavy lifting may find VOO's lower yield perfectly acceptable.

Fees & Liquidity

VOO charges half of what SCHD does - 0.03% versus 0.06% annually. On a $10,000 investment, that's $3 versus $6 per year. While both fees are remarkably low, the difference becomes meaningful in larger portfolios. A $100,000 position would cost $30 annually with VOO compared to $60 with SCHD.

The gap reflects what each fund delivers. VOO simply tracks the entire S&P 500, requiring minimal management beyond periodic rebalancing. SCHD's strategy demands more work - screening for dividend consistency, financial health metrics, and regular rebalancing to maintain its quality-focused approach. Whether that extra 0.03% is worthwhile depends on whether you value dividend income and the value tilt SCHD provides over pure market exposure.

ETF Composition: Asset Classes

Both ETFs are virtually identical when it comes to geographic exposure - each parks about 99% of assets in U.S. stocks, with the remaining sliver split between foreign equities and cash. The difference shows up in what those domestic holdings actually represent. VOO simply owns the entire S&P 500, so its sector mix mirrors the broad market's current bias toward technology at 35%. SCHD, by contrast, starts with a dividend screen, which naturally tilts the portfolio away from growth-heavy tech and into more mature cash-generating sectors like energy (20.6%) and consumer staples (18.2%).

That dividend focus also compresses valuations. SCHD trades at 13.7x earnings versus VOO's 22.4x multiple, reflecting its emphasis on companies that return capital rather than reinvest it for growth. The trade-off is visible in performance: VOO's 14.4% one-year return handily beat SCHD's 7.8%, but SCHD compensates with a 3.8% yield that triples VOO's 1.1% payout. Neither approach is inherently better - it comes down to whether you want market-weight exposure or a value tilt with higher income.

Regional Allocation

Both SCHD and VOO are essentially U.S.-only funds. SCHD keeps 99.2% of its portfolio in North American stocks, while VOO is even more domestic at 99.5%. The tiny residual is mostly a handful of U.K.-listed ADRs or dual-listed shares that the indexes still count as U.S. equity; neither product is making a conscious bet on overseas markets.

What this means is that regional diversification won’t differentiate these two ETFs you’re getting the same dollar-based exposure either way. If you want international balance you’ll need to pair either fund with a separate developed- or emerging-market holding. SCHD’s 0.8% non-U.S. weight and VOO’s 0.5% are rounding errors, not asset-allocation tools.

Sector Weights

SCHD tilts hard toward dividend-friendly corners of the market: one-fifth of the portfolio sits in energy pipelines and refiners, another 18% in consumer staples, and 15.5% in healthcare. That mix is no accident companies in these pockets often generate reliable cash and are willing to share it. VOO, tracking the S&P 500, flips that script. Tech gets a 35% weighting, three times SCHD’s slice, while energy is a rounding error at just 2.8%. Add in the heavier 13% stake in financials and 10.9% in communication services, and VOO ends up with a growth-oriented profile that looks very different from the yield screen driving SCHD.

What this means for your portfolio is a choice between income now and growth later. SCHD’s sector stack trades at 13.7× earnings and yields 3.8%, so you’re buying cheaper, cash-rich firms that send you regular checks. VOO’s tech-heavy lineup trades at 22.4× earnings and yields only 1.1%, betting that today’s reinvested profits turn into tomorrow’s higher prices. Neither mix is “right” energy and staples can lag in rallies, while tech can crater in selloffs so the question is whether you want the steadier dividends or the broader market ride.

Top 10 Holdings

SCHD's top five holdings read like a who's who of dividend stalwarts from defensive sectors - defense contractor Lockheed Martin leads at 4.69%, followed by energy giant Chevron at 4.15%. These positions reflect the fund's focus on companies with consistent dividend payments and reasonable valuations. The largest holding barely cracks 4.7%, showing how SCHD spreads its bets across 100+ stocks rather than concentrating risk.

VOO tells a completely different story. Tech behemoths dominate the top spots, with NVIDIA claiming 7.75% of the fund - nearly double SCHD's largest position. Apple and Microsoft combine for another 13% between them. This concentration means just five companies make up over 27% of VOO's portfolio, giving investors heavy exposure to the tech sector's performance. The difference is stark: while SCHD's approach caps individual holdings around 4-5%, VOO's market-cap weighting lets mega-caps swell to significant portions of the fund.

Valuation & Growth Metrics

SCHD trades at a significant discount to VOO across all valuation metrics - its 13.7 P/E ratio sits 39% below VOO's 22.4, while the price-to-book gap is even wider at 2.7 versus 4.6. These lower multiples reflect SCHD's value tilt toward established dividend payers like energy and consumer staples companies, compared with VOO's heavy tech weighting that commands premium valuations.

The growth picture flips this script entirely. VOO's holdings show long-term earnings growth of 10.5% against SCHD's 5.6%, and the historical earnings gap is stark - VOO companies grew profits 10.2% annually while SCHD's actually declined 1.7% over the measured period. Sales growth follows the same pattern at 8% for VOO versus 4.3% for SCHD. What you're really choosing here is cheaper valuations with slower growth prospects against higher prices for faster-growing businesses.

Which ETF Fits Your Portfolio?

If you're investing for income or want to cushion your portfolio during downturns, SCHD's 3.82% yield and value tilt can help. The fund trades at 13.7 times earnings and leans toward dividend-rich sectors like energy and consumer staples - companies that tend to hold up better when markets get choppy. You'll sacrifice some upside, though. SCHD returned 7.8% this past year while charging 0.06% annually.

VOO makes more sense for long-term growth investors. The S&P 500 tracker delivered nearly double SCHD's return at 14.4%, thanks to its 35% weighting in high-flying tech stocks. Its 0.03% expense ratio is half the cost, though the 1.13% dividend yield won't excite income seekers. The 22.4 P/E reflects those premium valuations. Pick your poison: SCHD for steady dividends and downside protection, VOO for capturing the broad market's growth at rock-bottom cost.

If you want to have look at other ETF comparisons, check out this: Fund Overlap Tool

Data sources: The data has been obtained from the ETF provider's website and ETF fact sheet.