VOO vs SCHD
S&P 500 (VOO) vs US Dividend Equity (SCHD) — Total market growth or dividend income?
Understanding VOO and SCHD
VOO (Vanguard S&P 500 ETF) tracks the S&P 500 — 500 largest US companies, market-cap weighted. It's the default choice for passive investors, with a rock-bottom 0.03% expense ratio and broad diversification across all sectors. VOO prioritizes total return through capital appreciation.
SCHD (Schwab US Dividend Equity ETF) screens for ~100 high-quality dividend stocks using fundamentals: 10+ years of consecutive dividends, strong cash flow, low debt. With ~3.5% yield and 0.06% expense ratio, SCHD has become the most popular dividend ETF. It focuses on established, profitable companies that return cash to shareholders.
This is the most popular debate in passive investing: do you want total market growth (VOO) or dividend income (SCHD)? VOO has higher total returns over most periods, but SCHD provides steady, growing income. VOO is ~25% tech; SCHD is heavy in financials, industrials, and consumer staples.
VOO vs SCHD: The Numbers
Compare VOO 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 | VOO | SCHD | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.06% | VOO |
| Total Assets | $1.5T | $85.9B | VOO |
| Number of Holdings | ~500 | ~100 | VOO |
| 1 Year Return | +19.57% | +13.48% | VOO |
| 5 Year Return | +79.06% | +50.14% | VOO |
| 10 Year Return | +280.74% | +219.40% | VOO |
| Volatility (3Y) | 11.6% | 13.5% | VOO |
| Max Drawdown | -23.9% | -21.5% | SCHD |
| Current Price | $609.09 | N/A | — |
The Dividend Income Calculator: What $100,000 Pays You
The biggest practical difference between VOO and SCHD is how much cash lands in your account each year. Here's what a $100,000 investment generates in annual dividend income:
SCHD pays nearly 3x more income than VOO. For retirees living off their portfolio, SCHD's dividends cover a significant portion of the typical 4% withdrawal rate — VOO's don't come close.
Dividend growth matters too: SCHD's dividends have grown ~12% annually, so income compounds over time. A $100K SCHD investment today paying $3,500/year could be paying $6,000+ in 5 years without adding a dollar.
Tax consideration: In taxable accounts, dividends create tax drag — you pay taxes on income whether you reinvest or not. This gives VOO a structural advantage in taxable brokerage accounts. In retirement accounts (IRA, 401k), there's no tax drag, making SCHD's income a pure benefit.
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 VOO and SCHD often move together during market-wide events, but SCHD tends to have more moderate swings due to its quality/value tilt.
VOO Monthly Returns
SCHD Monthly Returns
Key Differences: Index vs Dividend Strategy
VOO (S&P 500)
- • 500 companies, all sectors represented
- • Growth + value blend, market-cap weighted
- • Low dividend yield (~1.3%)
- • Tech-heavy (~30% of portfolio)
- • Best for accumulation phase
SCHD (Dividend Equity)
- • ~100 dividend-quality stocks
- • Screens for financial strength and consistency
- • High dividend yield (~3.5%)
- • Financials/industrials heavy
- • Best for income phase
The Bottom Line: Accumulation vs Income
Choose VOO if you're in the accumulation phase and want maximum total return. The S&P 500 has been the gold standard for long-term wealth building. Choose SCHD if you need income or want lower volatility with growing dividends. A popular strategy: hold VOO while working, then gradually shift to SCHD as you approach retirement.
Frequently Asked Questions
Should I invest in VOO or SCHD?
If you are in the accumulation phase and want maximum total return, VOO is the better choice. If you need income now or prefer lower volatility, SCHD is ideal. Many investors hold both and shift from VOO to SCHD as they approach retirement.
What is the dividend yield of VOO vs SCHD?
VOO yields approximately 1.3%, while SCHD yields approximately 3.5%. SCHD pays nearly 3x more in dividends, making it significantly better for income-focused investors.
Can I hold both VOO and SCHD?
Yes, holding both is a popular strategy. VOO gives you broad S&P 500 exposure for growth, while SCHD adds a dividend income tilt. There is some overlap since SCHD holds large-cap stocks that are also in the S&P 500, but the weighting and selection criteria are very different.
Which has better total returns, VOO or SCHD?
Over most time periods, VOO has delivered higher total returns due to its broader market exposure and tech-heavy weighting. However, SCHD has outperformed during certain market downturns due to its value/quality tilt and lower volatility.
S&P 500 Alternatives & Dividend ETF Alternatives
VOO and SCHD aren't the only options. Here are alternative ETFs that offer similar exposure:
S&P 500 Alternatives
- SPY — SPDR S&P 500 ETF. The original and most-traded S&P 500 ETF. Higher expense ratio (0.09%) but unmatched liquidity.
- SPLG — SPDR Portfolio S&P 500 ETF. State Street's low-cost S&P 500 option at 0.02% expense ratio.
- IVV — iShares Core S&P 500 ETF. BlackRock's S&P 500 tracker with 0.03% expense ratio, same as VOO.
- FXAIX — Fidelity 500 Index Fund. Mutual fund alternative with 0.015% expense ratio 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 VOO & SCHD Comparisons
Last updated: 3/15/2026