SCHD vs VOO: Dividend Income or S&P 500?
This is a dividend ETF versus a plain S&P 500 tracker — two fundamentally different tools. One is for income now, one is for total return over time.
VOO has outperformed SCHD on total return in most recent windows because mega-cap tech dominated the S&P 500. SCHD pays roughly 3-4x the yield with a more defensive sector mix. VOO for pure growth; SCHD for current income. Holding both is also a perfectly reasonable answer.
Quick stats
| Metric | SCHD | VOO |
|---|---|---|
| Price | $31.05 | $652.78 |
| TTM yield | 3.40% | 1.09% |
| Real yield (NAV-adj.) | 4.22% | 1.51% |
| NAV change (period) | 24.1% | 38.2% |
| Annualized volatility | 1181.1% | 1327.2% |
| Distribution frequency | quarterly | quarterly |
| Expense ratio | 0.06% | 0.03% |
| Inception | 2011-10-20 | 2010-09-07 |
| AUM | ~$70B | ~$1.3T (Vanguard S&P 500 family) |
| 1Y dividend CAGR | -32.1% | 5.4% |
| 3Y dividend CAGR | 7.0% | 5.9% |
| 5Y dividend CAGR | 9.2% | 5.9% |
| 5Y price CAGR | 4.5% | 11.3% |
Strategy & holdings
VOO is a market-cap-weighted S&P 500 index fund. No screens, no selection, no active decisions — it holds what the index holds in proportion to market cap. SCHD is the opposite: a quality-screened, dividend-focused basket of ~100 stocks that deliberately excludes most of the mega-cap tech names that dominate VOO.
Dow Jones U.S. Dividend 100 Index — ~100 US stocks screened for 10+ year dividend history, cash-flow-to-debt, ROE, dividend yield, and dividend growth. Heavy on financials, healthcare, consumer staples, industrials. Excludes REITs.
Tracks the S&P 500 — 500 largest US companies weighted by market cap. Top 10 holdings (Apple, Microsoft, Nvidia, Amazon, Meta, Alphabet, Tesla, etc.) typically make up 30%+ of the fund.
VOO's top weights are now dominated by the Magnificent 7 — Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta, Tesla. These companies pay little or no dividend and grow through buybacks and price appreciation. SCHD explicitly excludes most of them because they don't meet the dividend history requirement. This single fact explains almost everything: why VOO has dramatically outperformed SCHD in the last 3-5 years (mega-cap tech bull run), why SCHD yields roughly 4x more than VOO (actual dividends), and why the two funds behave very differently in a correction.
Yield & distributions
VOO's yield is typically 1.2-1.5%, the blended yield of the S&P 500. SCHD's is typically 3.5-4%. On a $100k investment, that's roughly $1,300 from VOO versus $3,700 from SCHD in annual distributions. SCHD's dividend also grows faster — roughly 10-11% CAGR historically versus the S&P's 5-6%. If income now and growing income matter, SCHD is the tool.
Total return & NAV
This is where VOO dominates in recent history. 2019-2024 was an extraordinary run for mega-cap tech, and VOO captured it while SCHD did not. Over 10Y+ windows the gap is smaller, and in the pre-2015 decade the results were reversed (value and dividend stocks beat the S&P 500). The honest answer is that VOO's outperformance has been driven by a specific regime. If you believe mega-cap tech continues to dominate, VOO wins. If you think we're due for mean reversion, SCHD has a chance.
Risk & volatility
SCHD has historically shown lower beta and smaller drawdowns than VOO in most corrections — the 2022 bear market is a good example, where SCHD fell meaningfully less than VOO. That defensive profile comes from the sector mix (staples, healthcare, financials rather than tech) and the dividend-payer bias. VOO's risk is concentrated — with the top 10 holdings ~30% of the fund, a tech-sector correction drags VOO much more than SCHD.
Tax treatment
Both funds are extremely tax-efficient. Both pay almost entirely qualified dividends. VOO's lower yield means less income gets taxed each year, which can be an advantage in taxable accounts for buy-and-hold investors. SCHD's higher yield is still tax-efficient but does generate more taxable income annually.