SCHD vs VTI: Side-by-Side ETF Comparison

SCHD vs VTI comes down to dividend income versus total market exposure - SCHD pays 3.82% yield but returned just 7.8% this year, while VTI's 1.12% yield accompanied 14.07% returns with broad U.S. market coverage including 33% tech allocation. SCHD focuses on dividend-paying value stocks in energy and defensive sectors at 13.73x earnings, whereas VTI owns the entire market at 21.46x earnings.

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

Charles Schwab's SCHD takes a quality-first approach to dividend investing. The fund tracks an index that screens for companies with both consistent dividend payments and fundamental strength relative to peers, resulting in a portfolio yielding 3.82% - more than triple VTI's 1.12%. This income focus naturally tilts SCHD toward value stocks, with energy (20.6%) and consumer defensive (18.2%) making up nearly 40% of holdings. The 13.73 P/E ratio reflects this value orientation, trading at a significant discount to the broader market.

Vanguard's VTI offers the opposite extreme: complete market coverage. The fund holds approximately 4,000 stocks representing nearly 100% of the investable U.S. market, from micro-caps to megacaps. This comprehensive approach means VTI's performance closely mirrors the overall stock market, with technology dominating at 33.2% of assets. The fund's 0.03% expense ratio undercuts even SCHD's low 0.06% fee, though both are remarkably cheap. Where SCHD sacrifices some diversification for income and quality, VTI sacrifices nothing in its quest for pure market exposure.

Annual & Cumulative Returns

SCHD's recent strength shows up in the year-to-date numbers, where its 6.23% gain leaves VTI's 1.58% far behind. That edge flips when you stretch the window: over three years the dividend ETF compounds at 8.5% a year while the total-market fund clocks 20.8%, and the gap only narrows modestly over five years (9.7% vs 12.7%). In other words, SCHD has offered a smoother ride, but the price has been meaningful under-performance during the long bull stretches when large-cap growth names led.

The pattern matters for timing and temperament. If you bought SCHD ten years ago you'd still have a perfectly respectable 12.8% annual return, only 2.5 percentage points a year behind VTI's 15.3%, and you'd have collected more than triple the cash yield along the way. Investors who value that income cushion and who don't mind trailing when tech rallies may find the trade-off acceptable. Those seeking the highest long-term growth, and who can stomach deeper drawdowns, will probably keep reaching for the broader, cheaper fund.

Risk Metrics

The volatility numbers tell a straightforward story: both funds move pretty much in lockstep, with SCHD's 1-year standard deviation of 11.45% barely edging out VTI's 11.38%. This three-basis-point gap holds steady over three years too, so investors aren't getting any meaningful volatility reduction from SCHD's dividend-focused approach. The real separation shows up in risk-adjusted returns, where VTI's Sharpe ratio of 1.29 absolutely crushes SCHD's 0.2 - meaning VTI delivered substantially more return per unit of risk taken.

This Sharpe gap explains why VTI's 14.07% one-year return feels more impressive than SCHD's 7.8% when you factor in the similar volatility profiles. SCHD's dividend tilt toward defensive sectors like consumer staples and utilities (which make up over a third of the fund) isn't providing the downside protection you might expect. For investors choosing between these two, the risk metrics suggest VTI offers better compensation for the market swings you'll experience either way.

Dividend Yield & Growth

SCHD's 3.82% yield is more than triple VTI's 1.12%, which means an investor putting $10,000 to work would collect about $382 in annual dividends from SCHD versus roughly $112 from VTI. That 270-basis-point gap reflects the funds' different missions: SCHD specifically targets companies with a consistent record of generous payouts, while VTI simply owns the whole market and inherits whatever the average yield happens to be. The trade-off shows up in the sector mix - SCHD's heavy tilt toward cash-rich energy, consumer staples and healthcare names naturally pushes the yield higher, whereas VTI's 33% technology weighting drags its yield down because many tech firms prefer buybacks over dividends.

Payment timing is another subtle difference. VTI distributes quarterly like most index funds, giving investors predictable income every three months. SCHD's schedule isn't fixed in the prospectus, though in practice it also pays quarterly; the lack of an explicit commitment simply leaves Schwab room to adjust if market conditions warrant. For retirees or others budgeting around dividend cash flow, VTI's declared quarterly rhythm offers slightly more certainty, while SCHD investors should expect roughly similar timing but with a larger dollar amount hitting the account.

Fees & Liquidity

VTI costs half as much to own as SCHD: three basis points versus six. On a $10,000 position that’s $3 a year versus $6, small enough that most investors won’t notice, but on a six-figure portfolio the gap becomes visible and compounds quietly for decades. Both funds trade free at their sponsor’s brokerage and carry razor-thin bid-ask spreads usually a penny so the real differentiator is the headline fee, not hidden transaction costs.

What you do with the three-basis-point savings depends on how you value the portfolios. VTI’s lower fee buys you the whole U.S. market, while SCHD’s higher fee buys you a dividend screen that currently yields 3.8% versus VTI’s 1.1%. If you’re reinvesting dividends and holding for ten-plus years, the extra 0.03% is probably noise next to the yield gap; if you’re building a low-turnover core position and simply want maximum diversification at minimum cost, VTI keeps more of every dollar you put in.

ETF Composition: Asset Classes

Both funds keep things almost entirely in U.S. equities SCHD parks 99.1% here while VTI holds 98.8%. The tiny residuals are rounding-error small: each keeps well under 1% in foreign shares and about a tenth of one percent in cash. In other words, neither portfolio is trying to add extra return through currency plays or overseas bets; you’re buying the American stock market, period.

That said, the way each fund defines “the market” is what really separates them. SCHD’s razor-thin 0.8% non-U.S. slice reflects its focus on companies with long dividend track records firms that happen to be domiciled in the States. VTI’s 0.6% abroad plus a whisker of “other” assets simply mirrors the micro-caps and REITs that slip into the total-market index. For tax-efficiency and simplicity, both approaches work, but if you want pure, cap-weighted exposure across every U.S. listing, VTI’s composition is the closer match.

Regional Allocation

Both SCHD and VTI are essentially all-in on U.S. equities, with North-American listings making up 99.2% and 99.5% of their portfolios respectively. The difference shows up in the slivers that leak outside the border: SCHD keeps a 0.8% toe-hold in the U.K. and a rounding-error in Latin America, while VTI sprinkles an identical 0.8% across a wider map Japan, Korea, the U.K. and a handful of emerging Asian listings. Practically, this means neither fund gives you any real hedge against dollar weakness or access to faster-growing foreign markets; the geographic bet is the same, even if the passport stamps vary.

What matters is why those tiny non-U.S. positions exist. SCHD’s 0.8% overseas weight comes from a handful of London-listed ADRs of dividend-paying multinationals that still meet its yield screen think consumer-staples giants that mail checks every quarter. VTI’s broader 0.5% foreign slice is simply the by-product of owning the entire U.S. market: some mid- and small-caps file abroad or keep secondary listings, so the index automatically picks them up. Bottom line, if you’re buying either ETF for international diversification, you won’t get it; you’re simply choosing between two slightly different ways to own corporate America.

Sector Weights

SCHD's sector makeup tells a clear story about its dividend focus. Energy stocks dominate at 20.6% of the portfolio, nearly seven times VTI's 2.9% allocation. Consumer defensive names fill another 18.2% of SCHD's holdings, reflecting the fund's preference for established companies that reliably return cash to shareholders. This concentration in mature, cash-generating businesses explains why you'll find tobacco giants and utility-like energy producers alongside consumer staples.

The contrast with VTI couldn't be starker. Technology commands a third of the total market fund at 33.2%, while SCHD keeps tech exposure modest at 9.4%. VTI's sector weights essentially mirror the broader market, giving you everything from real estate investment trusts to communication services that SCHD mostly skips. For investors, this means SCHD offers more defensive positioning but less diversification, while VTI provides pure market exposure without the dividend screen tilting you toward value sectors. Your choice depends on whether you want income stability or complete market representation.

Top 10 Holdings

SCHD's top holdings read like a who's who of established dividend payers - defense contractor Lockheed Martin leads at 4.69%, followed by energy giant Chevron at 4.15%. The remaining top five positions cluster tightly around 4% each, showing how the fund spreads its bets across reliable dividend stocks rather than concentrating in any single name. This approach reflects the fund's focus on companies with consistent dividend histories and fundamental strength.

VTI tells a completely different story. Tech dominates the top holdings, with NVIDIA claiming the top spot at 6.56% - nearly 40% larger than SCHD's biggest position. Apple and Microsoft follow close behind at 6.12% and 5.48% respectively, while Amazon and Alphabet round out the top five. The concentration here is striking - just five tech-heavy positions make up about 24% of the entire fund, showing how VTI's market-cap weighting naturally tilts toward today's mega-cap winners.

Valuation & Growth Metrics

SCHD trades at a significant discount across every valuation metric - its 13.7 P/E ratio sits 36% below VTI's 21.5, while the price-to-book gap is even wider at 2.7 versus 4.1. This value tilt isn't surprising given SCHD's focus on dividend-paying stalwarts like Chevron and Verizon, companies that typically command lower multiples than the growth-oriented tech giants dominating VTI.

The trade-off becomes clear when you look at growth rates. VTI's holdings have delivered 10.6% long-term earnings growth compared to SCHD's 5.6%, and the historical earnings growth disparity is even more pronounced at 8.7% versus negative 1.7%. These numbers tell the story of two different investment approaches: SCHD offers cheaper entry points and higher current income (that 3.8% yield), while VTI provides exposure to companies with stronger growth trajectories but at richer valuations.

Which ETF Fits Your Portfolio?

SCHD suits investors who want their portfolio to pay them today. That 3.82% yield is more than triple VTI's, and the underlying companies trade at a 13.7 P/E - noticeably cheaper than the broad market. You're swapping away some growth for that income, though; the fund's heavy tilt toward energy and consumer staples kept the 12-month gain to 7.8% while the overall market roared ahead.

VTI is the "own everything" choice. At 0.03% in fees it's basically free to hold, and by mirroring the entire U.S. market it captured last year's 14.1% rally, powered mostly by its 33% tech weighting. The trade-off is a skimpy 1.1% yield and a loftier 21.5 valuation. Pick SCHD if cash flow matters more than price swings, stick with VTI if you'd rather ride the full market cycle and reinvest dividends along the way.

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.