VTI vs SCHD: Side-by-Side ETF Comparison

VTI vs SCHD comes down to growth versus income: VTI gives you the entire U.S. market at a rock-bottom 0.03% fee and delivered 14.07% last year, while SCHD focuses on dividend payers yielding 3.82% but returned just 7.80%. One owns everything including 33% tech, the other concentrates in energy and defensive stocks trading at a cheaper 13.73 P/E.

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 VTI throws the widest possible net across American stocks, tracking essentially the entire investable market from Apple down to micro-caps you've never heard of. The fund's 0.03% expense ratio means you pay just 30 cents annually per $1,000 invested, making it practically free to own the whole market. This breadth shows up in sector weightings too - technology dominates at 33.2%, nearly double SCHD's exposure, while financial services and consumer cyclicals round out the top three at 13.3% and 10.5% respectively.

Schwab's SCHD takes a completely different approach, hunting only for companies that reliably mail dividend checks. The ETF's 3.82% yield dwarfs VTI's 1.12%, but this income focus means owning different kinds of companies. Energy stocks lead at 20.6% - more than triple VTI's allocation - followed by consumer defensive (18.2%) and healthcare (15.5%). At 0.06% annually, SCHD costs twice VTI's fee but still qualifies as dirt-cheap. The trade-off becomes clear in valuations: SCHD's holdings trade at 13.7 times earnings versus VTI's 21.5, reflecting its tilt toward mature, slower-growing businesses that return cash to shareholders rather than reinvesting for growth.

Annual & Cumulative Returns

The numbers tell a clear story about two very different investment approaches. VTI's 14.07% one-year return nearly doubles SCHD's 7.8%, and this outperformance pattern holds across most time periods. Over the past decade, VTI's 15.29% annual return beats SCHD's 12.81% by a solid margin. Yet 2024 has flipped the script - SCHD's 6.23% year-to-date gain trounces VTI's modest 1.58%.

These divergent paths reflect what's under the hood. VTI's tech-heavy portfolio (33.2% allocation) rode the growth wave during the long bull market, while SCHD's value-focused dividend stocks lagged behind. The catch? SCHD's 3.82% dividend yield offers real income that VTI's 1.12% can't match. Investors choosing between them face a classic trade-off: higher total returns with VTI versus steadier income and current market resilience with SCHD.

Risk Metrics

Both ETFs display nearly identical volatility patterns, with VTI at 11.38% and SCHD at 11.45% over the past year - a difference so small you'd barely feel it in your portfolio. The three-year numbers tell the same story, hovering around 12.6% for both funds. This might surprise investors who expect dividend-focused stocks to be noticeably smoother rides, but SCHD's concentration in defensive sectors like consumer staples and healthcare doesn't translate to meaningfully lower swings.

The Sharpe ratio reveals the real distinction between these approaches. VTI's 1.29 ratio shows it's delivered substantially better risk-adjusted returns than SCHD's 0.2 over the past three years. In practical terms, VTI investors have been compensated with roughly six times more return per unit of risk taken. This gap reflects the challenging period for value stocks and dividend payers - while SCHD's 3.82% yield looks attractive on paper, the total return story favors VTI's broader market approach.

Dividend Yield & Growth

VTI's 1.12% yield reflects its job as a total-market tracker - most of its 3,900 holdings pay little or nothing, so the blended payout lands well below the S&P 500's own yield. SCHD, built only for dividends, starts with a 3.82% yield that's more than triple VTI's and arrives every quarter from the 100 large-cap names that have raised payments for at least ten straight years. The trade-off is built right into the numbers: the market ETF gives you the market's income, while the dividend ETF squeezes out extra cash by overweighting mature, cash-rich sectors such as energy pipelines and consumer staples.

What this means in practice is that $100,000 parked in SCHD throws off about $2,700 more annual income than the same stake in VTI before taxes. If you're reinvesting anyway, that gap can compound in SCHD's favor, though you'll miss the 33% tech allocation that has driven VTI's recent 14% return. Neither approach is "wrong" - it's simply a question of whether you want the market's full growth potential with a modest income kicker, or a fatter cheque today from companies that have already proven they can mail them through recessions.

Fees & Liquidity

VTI's 0.03% expense ratio is about as low as it gets in the ETF world - you're paying three cents annually for every hundred dollars invested. SCHD costs twice that at 0.06%, which still rounds to essentially nothing in dollar terms. On a $10,000 position, that's three bucks versus six bucks per year. The difference won't move the needle for most investors, though if you're running a seven-figure portfolio, you might notice.

Both funds trade millions of shares daily, so bid-ask spreads stay razor-thin and you won't get dinged on entry or exit. Neither charges trading commissions at major brokerages anymore. The real cost consideration is opportunity: VTI's tech-heavy allocation has delivered 14% over the past year while SCHD's dividend focus returned 7.8%. Whether that lower fee justifies potentially lower returns depends on whether you're after broad market exposure or steady income.

ETF Composition: Asset Classes

VTI keeps almost nothing in cash - just 0.41% - which makes sense since it's designed to track the entire U.S. market as closely as possible. The fund owns 98.8% U.S. stocks with a tiny 0.6% international allocation, essentially giving you pure American equity exposure. SCHD follows a similar pattern with 99.1% in U.S. stocks and even less cash at 0.09%, showing both funds stay fully invested rather than trying to time markets.

The real difference isn't in these broad asset class splits - both are almost entirely domestic stock funds. What matters is how they deploy that 99% equity allocation. VTI spreads it across thousands of companies from Apple down to micro-caps, while SCHD concentrates in about 100 dividend-paying stocks. Same asset class, completely different risk profiles hiding behind nearly identical percentages.

Regional Allocation

Both ETFs stick almost exclusively to North American stocks, with VTI at 99.5% and SCHD at 99.2%. That hair-thin difference comes from SCHD's slight tilt toward UK listings (0.8% vs VTI's 0.04%), mostly oil majors and consumer staples that meet its dividend screens. Otherwise, neither fund ventures more than a few basis points outside the U.S. market - VTI's largest non-North American weight is 0.25% in developed Europe, while SCHD essentially ignores Asia and emerging markets entirely.

For investors, this means regional diversification isn't a differentiator here. You're getting pure U.S. exposure either way, with any overseas holdings rounding errors that won't move the needle. The real geographic story lies in how each fund weights within America: VTI owns the entire market cap spectrum including tiny micro-caps, while SCHD's dividend requirement naturally skews it toward established large-caps, though both remain domestic plays through and through.

Sector Weights

VTI's sector mix mirrors the broader market's tech-heavy tilt, with technology claiming a full third of assets at 33.2%. This dwarfs SCHD's modest 9.4% tech allocation, which instead loads up on energy at 20.6% versus VTI's slim 2.9% slice. The dividend-focused SCHD also maintains defensive positions that VTI barely touches - consumer staples make up 18.2% of SCHD but just 4.5% of VTI, while healthcare claims 15.5% compared to VTI's 10.3%.

These sector bets explain the performance gap. VTI's concentration in growth-oriented tech stocks drives higher returns in bull markets but leaves it exposed when sentiment shifts. SCHD's tilt toward energy and consumer staples provides ballast during volatility, though this diversification comes at the cost of missing the tech sector's explosive growth. Neither approach is inherently superior - VTI offers pure market exposure while SCHD trades some upside for dividend stability and sector balance.

Top 10 Holdings

VTI's top five holdings read like a who's who of mega-cap tech, with NVIDIA leading at 6.56% followed by Apple (6.12%) and Microsoft (5.48%). These three positions alone represent nearly 18% of the entire fund, which tracks the total U.S. market. The concentration isn't accidental - the fund simply mirrors what exists in the broader market, where tech giants have grown to dominate benchmarks.

SCHD takes a completely different approach, favoring established dividend payers across varied sectors. Its largest holding, defense contractor Lockheed Martin at 4.69%, barely exceeds the fifth-largest position in VTI. Chevron's 4.15% weighting reflects the fund's 20.6% energy allocation, while healthcare names like Bristol-Myers Squibb and Merck round out the top five. This results in a portfolio where no single stock wields outsized influence, and the 3.82% dividend yield provides income that VTI's 1.12% simply can't match.

Valuation & Growth Metrics

VTI trades at 21.5 times earnings and 4.1 times book value, reflecting its heavy tilt toward growth names in tech and consumer cyclicals. Those multiples are 56% and 52% higher than SCHD’s 13.7 P/E and 2.7 P/B, so you’re paying a clear premium for the market-wide basket. The flip side is that VTI’s holdings are still expanding profits at roughly 10.6% annually, double SCHD’s 5.6%, which helps justify the richer price tag if earnings momentum continues.

SCHD’s value orientation shows up everywhere: half the price-to-sales ratio (1.4 vs 2.9) and a dividend yield that’s triple VTI’s 1.1%. The trade-off is growth - SCHD’s historical earnings have actually shrunk 1.7% a year while VTI’s rose 8.7%, and recent sales growth is modest 4.3% versus a 39% decline for the total market (largely driven by last year’s tech rout). In short, VTI gives you higher current valuations but faster expected growth, while SCHD offers cheaper entry points and income now with slower runway ahead.

Which ETF Fits Your Portfolio?

VTI gives you the whole market in one fund - every sector, every size company, all for just 0.03% annually. That broad exposure helped it deliver a 14.07% return over the past year, though you'll only see about 1.12% in dividend income along the way. It's the set-it-and-forget-it choice that matches the overall market's performance.

SCHD takes a different path, focusing on companies that actually pay you to own them through a 3.82% dividend yield. The trade-off becomes clear in the numbers - it returned 7.80% this past year, lagging VTI by over six percentage points. But you're getting cheaper valuations at a 13.73 P/E ratio and steadier sectors like consumer staples and healthcare that tend to hold up better when markets get rocky. If you need portfolio income or want less volatility, SCHD makes sense. Otherwise, VTI's hard to beat for pure growth and simplicity.

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.