SCHD vs QQQ: Which Should You Pick?
Dividend value against Nasdaq growth: 8 shared stocks, a 0.62 correlation. QQQ led 11 of 14 years since 2012; SCHD won 2022 by 29 points. Taxes, fees, fit.
SCHD and QQQ sit at opposite ends of the U.S. large-cap market. SCHD holds about 100 dividend payers chosen for long payout records, cash flow and yield, which leaves it heavy in consumer staples, health care and energy. QQQ holds the 100 largest non-financial companies on the Nasdaq exchange, which leaves it 68% technology. They share eight stocks, and their monthly returns have the lowest correlation of any pair among VOO, SCHD and QQQ.
Quick answer
Neither is a complete portfolio; each is a style bet. From October 2011 to September 2026, QQQ returned 19.80% a year and SCHD 13.09%, and QQQ won 11 of the 14 full calendar years. SCHD won the years when growth stocks fell, most clearly 2022, when it lost 3.2% to QQQ’s 32.6%. If you want one fund, a total-market or S&P 500 fund holds both styles. If you hold either in a taxable account, QQQ’s 0.42% yield creates far less taxable income than SCHD’s 3.24%.
| SCHD | QQQ | |
|---|---|---|
| Index | Dow Jones U.S. Dividend 100 | Nasdaq-100 |
| Expense ratio | 0.06% | 0.18% |
| Holdings | 102 | 102 |
| Top 10 holdings | 41% of the fund | 47% of the fund |
| Largest sectors | Consumer staples 20%, health care 19%, energy 15% (GICS) | Technology 68%, consumer discretionary 15% (ICB) |
| Trailing 12-month yield | 3.24% | 0.42% |
| Annual return since Oct 2011 | 13.09% | 19.80% |
| Annual return, 5 years | 9.47% | 16.32% |
| Volatility | 13.6% | 17.4% |
| 2022 return | -3.2% | -32.6% |
| 2023 return | 4.6% | 54.9% |
| Shared stocks | 8, about 5% overlap by weight | |
| Correlation of monthly returns | 0.62 | |
Schwab and Invesco fund pages, read October 25, 2026. Returns, volatility, declines, correlation and overlap are Summitward calculations; overlap uses Schwab holdings of October 13 and Invesco holdings of October 23, 2026.
Two different screens
SCHD’s index requires ten consecutive years of dividends, keeps the higher-yielding half of the eligible stocks, and ranks the rest on cash flow to debt, return on equity, yield and dividend growth. That excludes most fast-growing companies, which pay small dividends or none. QQQ’s index requires a Nasdaq listing, excludes financial companies, and weights by market value with no screen for valuation or profitability.
The eight shared stocks are Texas Instruments, Qualcomm, Amgen, PepsiCo, Automatic Data Processing, Comcast, Fastenal and Paychex. They are 24% of SCHD, including its two largest positions on October 13, and 5% of QQQ. The overlap by weight, counting the smaller weight in each shared stock, is about 5%.
What the record shows
QQQ led in 11 of the 14 full years from 2012 through 2025. SCHD led in 2016, 2021 and 2022, all years when value stocks beat growth stocks. The two largest gaps came back to back: SCHD ahead by 29 points in 2022, then behind by 50 points in 2023. Through September 2026, SCHD was ahead again, 21.5% to 20.8%.
Over the full window $10,000 grew to $148,732 in QQQ and $62,852 in SCHD. QQQ was more volatile, 17.4% a year against 13.6%, and its worst decline in the window, 35% to a November 2022 low, was larger than SCHD’s worst, 33% in the March 2020 crash. Fifteen years in which large technology companies led the market favor QQQ; the full QQQ record since 1999 includes an 83% decline from 2000 to 2002, covered on the VOO vs QQQ page.
A correlation of 0.62 is low for two U.S. large-cap funds, and that is why some investors hold both as a barbell. Combined, they still hold almost no small companies, few foreign companies, and less than 10% in banks and other financial companies. Our VOO + QQQ + SCHD guide covers what that three-fund mix leaves out.
Taxes in a brokerage account
At the top 23.8% federal rate, taxes on distributions cut ten-year returns by 0.90 points a year for SCHD and 0.19 for QQQ, before any shares were sold. Part of SCHD’s extra tax is only paid early, since a low-yield fund owes more capital-gains tax at a sale; our SCHD after-tax analysis measures the lasting part. QQQ charges 0.18%, three times SCHD’s 0.06%; QQQM holds the same index for 0.15%.
Who should pick which
Pick SCHD if you
- Want a tilt toward profitable, dividend-paying value stocks.
- Hold it in an IRA or 401(k), or pay 0% on qualified dividends.
- Can accept trailing growth stocks by wide margins in years like 2023.
Pick QQQ if you
- Want an overweight to large technology and growth companies.
- Want little taxable income in a brokerage account.
- Can hold through declines like 2022 and 2000 to 2002.
For most investors choosing between the two, the better answer is a fund that holds both styles at market weight. The VOO vs SCHD vs QQQ page puts all three side by side.
Sources
- Schwab Asset Management, SCHD fund page (holdings October 13 and 22, 2026; sectors, yield and returns September 30, 2026); S&P Dow Jones Indices, Dow Jones Dividend Indices Methodology.
- Invesco, QQQ fund page (expense ratio and full holdings at October 23, 2026; sector weights and returns at September 30, 2026).
- Summitward calculations: script and data.
Want to see how this fits your whole portfolio?
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