QQQ vs SCHD
NASDAQ 100 (QQQ) vs Schwab US Dividend Equity (SCHD) — Growth or income?
Understanding QQQ and SCHD
QQQ (Invesco QQQ Trust) tracks the NASDAQ-100, providing concentrated exposure to the 100 largest non-financial NASDAQ companies. Dominated by tech giants like Apple, Microsoft, and NVIDIA, QQQ is built for capital appreciation with minimal dividend yield (~0.6%).
SCHD (Schwab US Dividend Equity ETF) takes the opposite approach — selecting ~100 high-quality US dividend stocks based on financial strength, dividend consistency, and yield. With a dividend yield typically above 3% and an expense ratio of just 0.06%, SCHD has become the most popular dividend ETF.
This is the classic growth vs income debate. QQQ's tech-heavy portfolio has delivered +482.59% over 10 years through price appreciation, while SCHD focuses on total return through dividends and steady growth. SCHD's lower volatility (13.5% vs QQQ's 14.3%) and income stream appeal to retirees and conservative investors.
QQQ vs SCHD: The Numbers
Compare QQQ and SCHD across key metrics that matter to long-term investors: expense ratios, historical returns, volatility, and maximum drawdown. The "Winner" column highlights which ETF performs better on each metric.
| Metric | QQQ | SCHD | Winner |
|---|---|---|---|
| Expense Ratio | 0.18% | 0.06% | SCHD |
| Total Assets | $395.0B | $85.9B | QQQ |
| Number of Holdings | ~100 | ~100 | Tie |
| 1 Year Return | +27.08% | +13.48% | QQQ |
| 5 Year Return | +91.41% | +50.14% | QQQ |
| 10 Year Return | +482.59% | +219.40% | QQQ |
| Volatility (3Y) | 14.3% | 13.5% | SCHD |
| Max Drawdown | -81.1% | -21.5% | SCHD |
| Current Price | $593.72 | N/A | — |
The Income Gap: What $100,000 Pays You
The biggest difference between QQQ and SCHD isn't returns — it's cash flow. Here's what a $100,000 investment generates in annual dividend income:
That's nearly 6x more income from SCHD. For a retiree withdrawing 4% per year, SCHD's dividends almost cover the entire withdrawal — QQQ's don't come close.
But total return matters too: QQQ's price appreciation has historically more than compensated for its lower dividends. A $100K investment in QQQ 10 years ago would be worth significantly more than SCHD — even after reinvesting SCHD's dividends. The question is whether you need income now or growth for later.
Growth of $10,000
The table below shows what $10,000 invested at different points in time would be worth today. The chart visualizes long-term growth starting from the same inception date for both ETFs.
Monthly Returns Comparison
These heatmaps reveal the month-by-month performance patterns of each ETF. Green indicates positive returns, red indicates negative returns, with darker colors showing larger moves. Use these to identify volatility patterns — notice how QQQ tends to have more extreme months (both positive and negative) compared to SCHD's more moderate swings.
QQQ Monthly Returns
SCHD Monthly Returns
Two Completely Different Philosophies
QQQ (NASDAQ 100)
- • Tech-dominated growth fund (~50% technology)
- • Low dividend yield (~0.6%)
- • Higher volatility and drawdowns
- • Returns driven by price appreciation
- • Best for younger investors with long time horizons
SCHD (Schwab US Dividend Equity)
- • High-quality dividend stocks (~3%+ yield)
- • Screens for financial strength and dividend history
- • Lower volatility, steadier returns
- • Returns from both dividends and price growth
- • Best for income investors and retirees
Growth or Income? Here's How to Decide
Choose QQQ if you're focused on capital appreciation and have a long time horizon. Choose SCHD if you want reliable income with lower volatility. Many investors hold both — QQQ for growth in taxable accounts, SCHD for income in retirement accounts.
Frequently Asked Questions
Should I invest in QQQ or SCHD?
It depends on your goals. QQQ is built for capital appreciation through tech-heavy growth, while SCHD focuses on reliable dividend income with lower volatility. QQQ has outperformed on total return historically but with higher risk.
What is the dividend yield of QQQ vs SCHD?
QQQ yields approximately 0.6%, while SCHD yields approximately 3.5%. SCHD pays roughly 6x more in dividends, making it far better for income-focused investors.
Can I hold both QQQ and SCHD?
Yes, this is a popular "barbell" strategy — QQQ for growth and SCHD for income and stability. There is minimal overlap since they hold very different stocks, making them complementary holdings.
What is the expense ratio for QQQ vs SCHD?
QQQ has an expense ratio of 0.18%, while SCHD has an expense ratio of 0.06%. Both are relatively low-cost ETFs.
QQQ Alternatives & Dividend ETF Alternatives
QQQ and SCHD aren't the only options. Here are alternative ETFs that offer similar exposure:
NASDAQ 100 Alternatives
- QQQM — Invesco NASDAQ 100 ETF. Same index as QQQ but with a lower expense ratio (0.15% vs 0.20%). Best for buy-and-hold investors.
- ONEQ — Fidelity NASDAQ Composite ETF. Tracks ~1,000 NASDAQ stocks, not just the top 100. Broader exposure.
- TQQQ — ProShares UltraPro QQQ. 3x daily leveraged QQQ. For short-term trading only, not buy-and-hold.
- FNCMX — Fidelity NASDAQ Composite Index Fund. Mutual fund alternative for retirement accounts.
Dividend ETF Alternatives
- VYM — Vanguard High Dividend Yield ETF. ~400 stocks, more diversified than SCHD with a similar yield.
- DVY — iShares Select Dividend ETF. Higher yield focus, ~100 dividend stocks with an income-first approach.
- HDV — iShares Core High Dividend ETF. Concentrated portfolio of ~75 high-dividend stocks focused on quality.
- DGRO — iShares Core Dividend Growth ETF. Focuses on dividend growth potential rather than just current yield.
More QQQ & SCHD Comparisons
Last updated: 3/15/2026