VOO vs SCHD: Side-by-Side ETF Comparison

VOO vs SCHD comes down to growth versus income: VOO tracks the S&P 500 with a 0.03% expense ratio and 1.13% yield, while SCHD targets dividend stocks yielding 3.82% but lagged with a 7.8% annual return compared to VOO's 14.4%. Pick VOO for broad market exposure heavy in tech (35% allocation), or SCHD if you want higher dividend income from value sectors like energy and consumer staples.

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

Vanguard's VOO and Schwab's SCHD start from different planets. VOO is the plain-vanilla tracker of the S&P 500: 500 of the biggest U.S. names, market-cap weighted, with a microscopic 0.03% expense ratio that leaves almost all of the index's 14.4% one-year gain in your pocket. The portfolio tilts heavily toward tech over a third of assets so the P/E sits at 22.4 and the dividend yield is a slim 1.1%, roughly what you'd expect from growth-heavy large caps.

SCHD, on the other hand, is built for cash flow. Schwab filters for companies that have not only paid but grown dividends for at least ten consecutive years, then scores them on cash-flow-to-debt, return on equity, and dividend growth rate. The resulting basket lands in the large-value bin, trades at a 13.7 P/E, and throws off a 3.8% yield more than triple VOO's while costing only 0.06%. Energy pipelines, consumer-staples giants, and healthcare stalwarts dominate the lineup, so the one-year return of 7.8% lags the broad market but arrives with a smoother ride and a steadier paycheck.

Annual & Cumulative Returns

The numbers tell a clear story about two very different investment approaches. VOO's 14.43% one-year return handily beat SCHD's 7.8%, extending a pattern where the S&P 500 tracker has outperformed across every major timeframe except year-to-date. Stretch it to three years and the gap widens dramatically - VOO's 21.51% annualized return versus SCHD's 8.5% shows how growth stocks have dominated this cycle. Even over a full decade, VOO's 15.69% edges out SCHD's still-respectable 12.81%.

But 2024's reversal hints at a potential shift. SCHD's 6.23% year-to-date gain while VOO barely treads water at 1.07% suggests dividend-focused strategies may be finding their footing. The value-oriented ETF trades at just 13.73 times earnings compared to VOO's 22.44, offering a margin of safety that could prove valuable if market leadership rotates. For investors choosing between them, it's really about temperament - VOO offers pure growth exposure with a rock-bottom 0.03% fee, while SCHD provides a hefty 3.82% yield and potential downside protection, albeit with slightly higher costs at 0.06%.

Risk Metrics

The numbers tell a clear story here. VOO shows lower volatility across both time periods, with 1-year volatility at 10.99% versus SCHD's 11.45%. That half-percentage point difference might seem small, but it compounds over time. The 3-year picture widens the gap slightly, VOO's 11.96% volatility against SCHD's 12.61%.

What's striking is the Sharpe ratio difference. At 1.4, VOO has delivered significantly better risk-adjusted returns compared to SCHD's 0.2 over three years. This means VOO investors have been compensated better for the risk they've taken on. The higher volatility in SCHD likely stems from its sector concentration, energy and consumer defensive stocks tend to swing more than the tech-heavy but more diversified S&P 500. For investors choosing between these funds, the question becomes whether SCHD's 3.82% dividend yield compensates for this risk-return trade-off.

Dividend Yield & Growth

The yield gap between these two funds is striking. SCHD's 3.82% yield is more than triple VOO's 1.13%, which means every $10,000 invested generates $382 versus $113 in annual dividend income. This difference stems from their fundamental approaches: VOO simply owns the entire S&P 500 regardless of dividend policy, while SCHD specifically targets companies with consistent dividend payment histories and stronger fundamentals.

For investors focused on income generation, SCHD clearly delivers more cash flow today. However, that higher yield comes with sector concentration in energy and consumer defensive stocks, which typically pay higher dividends but may offer less growth potential. VOO's lower yield reflects its heavy tech weighting (35.1%), where companies often prefer share buybacks over dividends. The choice ultimately depends on whether you prioritize immediate income or prefer the S&P 500's broader diversification with modest dividend income.

Fees & Liquidity

VOO's 0.03% expense ratio is about as low as fees get in this business - you're paying three cents annually for every hundred dollars invested. SCHD costs twice that at 0.06%, but we're still talking about an almost trivial difference in dollar terms. On a $10,000 position, that's three dollars versus six dollars per year. The real cost consideration isn't the expense ratio anyway - it's whether you're paying any trading commissions or dealing with wide bid-ask spreads, though both ETFs trade millions of shares daily so liquidity isn't a concern.

The fee difference becomes more meaningful when you consider what each fund delivers. VOO gives you the entire S&P 500 with minimal turnover, keeping costs naturally low. SCHD's dividend-focused strategy requires more active management to screen for consistent dividend payers and maintain quality standards, which helps justify the slightly higher fee. For most investors, the choice between these two shouldn't hinge on a 0.03% difference in expenses - it's more about whether you want broad market exposure or specifically targeted dividend growth.

ETF Composition: Asset Classes

Both funds keep things simple: they're essentially all-in on U.S. equities, with VOO at 99.07 percent domestic stocks and SCHD right beside it at 99.07 percent. The residual single-digit basis points are parked in a mix of cash, tinyADR positions, and other miscellany nothing that will move the needle. What this means for you is that either choice gives you a pure play on American companies; international diversification has to come from elsewhere in your portfolio.

The split inside that 99 percent is where the stories diverge. VOO’s holdings track the S&P 500, so you’re getting the market’s sector weights in roughly their natural proportions meaning more than a third of every dollar is parked in tech names. SCHD starts with the same U.S. market, then screens for dividend durability and fundamental health, so energy pipes, consumer-staples shelves, and healthcare labs crowd out some of the megacap software stocks. Same country, very different sector exposures, and that trade-off drives most of the day-to-day performance gap you’ll notice between the two.

Regional Allocation

Both funds are virtually identical when it comes to geographic exposure: VOO parks 99.5% of its assets in North America while SCHD is right behind at 99.2%. The scraps that sit outside the U.S. and Canada are immaterial VOO's 0.4% "Europe Developed" slice and 0.1% Asia Emerging allocation add up to less than most single-stock tracking error, and SCHD's 0.8% U.K. and trace Latin America positions are equally forgettable.

What this means is that neither ETF offers any meaningful international diversification. If the dollar strengthens or overseas markets surge, you won't participate through these holdings. The choice between them has to rest on something else sector mix, yield profile, or valuation not on where the companies earn their money.

Sector Weights

VOO mirrors the S&P 500's tech-heavy profile: more than a third of every dollar is parked in technology names, while energy gets less than 3 percent and utilities barely 2 percent. SCHD flips that script. Energy commands over 20 percent of the portfolio, and consumer staples think cereal, toothpaste, and household goods add another 18 percent. The result is a basket that leans on cash-rich, dividend-paying incumbents rather than the growth engines that dominate the broad index.

For investors, the contrast means different cyclical exposure. When oil prices spike or investors seek shelter in steady dividends, SCHD's overweight in pipelines, pharmaceuticals, and soap makers tends to cushion the ride. Conversely, during tech-led rallies, VOO's 35 percent stake in the sector captures more of the upside while SCHD's 9 percent tech weight leaves it behind. Neither mix is inherently better; it's a question of which economic weather you want your portfolio dressed for.

Top 10 Holdings

NVIDIA dominates VOO at 7.75%, nearly matching the combined weight of SCHD's two largest positions. The S&P tracker spreads 24% of its assets across just five tech giants, a concentration that explains both its recent 22.4 P/E and its sensitivity to growth-stock sentiment. SCHD's approach couldn't look more different: Lockheed Martin leads at 4.69%, and the top five holdings total barely 21% with no single stock above 5%. These aren't the high-fliers that populate VOO's roster, they're cash-rich, dividend-paying stalwarts trading at a 13.7 multiple.

What jumps out is how sector weightings map to individual names. VOO's 35% tech allocation shows up in familiar consumer-facing giants like Apple (6.87%) and Microsoft (6.15%), companies most investors already know. SCHD's tilt toward energy and defense surfaces in Chevron at 4.15% and Lockheed at 4.69%, names that don't appear in typical broad-market portfolios. The concentration gap matters: VOO's top five decide a quarter of your return, while SCHD's five largest barely move the needle, making SCHD less hostage to single-stock risk but also less likely to capture explosive tech moves.

Valuation & Growth Metrics

VOO trades at 22.4 times earnings and 4.6 times book value, nearly double SCHD's 13.7 P/E and 2.7 P/B. That premium buys faster growth: the S&P 500 tracker has delivered 10.5% long-term earnings growth and 8% sales growth, while SCHD's qualified dividend payers have managed just 5.6% and 4.3% respectively. The numbers spell out the familiar trade-off - you pay more for the index's tech-heavy roster in exchange for a higher growth trajectory.

SCHD's lower multiples also mask a weak spot: historical earnings have actually shrunk 1.7% over the past five years, suggesting the fund's value tilt screens for companies with slower, sometimes negative, profit trends. VOO's consistent 10% earnings expansion shows why investors accept a richer valuation - they're banking that today's premium gets eroded by tomorrow's faster compounding. Neither approach is inherently better; it comes down to whether you want growth at a fair price or income at a discount.

Which ETF Fits Your Portfolio?

VOO gives you the whole market at a rock-bottom 0.03% fee and just delivered 14.43% over the past year. That’s fine if you want the 35% tech weighting and can live on a 1.13% yield. SCHD costs twice as much still only 0.06% but pays 3.82% in cash every quarter and holds stodgier, cheaper stocks that kept last year’s gain to 7.8%. The trade-off is blunt: more growth and less income with VOO, more income and less growth with SCHD.

Pick VOO for the core of a retirement account where you’ll reinvest every dividend for the next decade or two. Use SCHD if you’re already spending the distributions or you sleep better owning pipelines, cereal makers, and drug companies at 13.7-times earnings instead of Apple and Microsoft at 22.4-times. There’s no law against holding both: a 70/30 or 60/40 split keeps you cheaply anchored to the S&P while the quarterly checks still roll in.

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.