VOO vs SCHD: Which Should You Pick?
From Oct 2011 to Sept 2026, $10,000 grew to $81,803 in VOO and $62,852 in SCHD, yet SCHD lost 3% in 2022 to VOO's 18%. Holdings, taxes, and which fits.
VOO holds the S&P 500, about 500 of the largest U.S. companies weighted by market value. SCHD holds about 100 of them, chosen by an index that requires ten straight years of dividends and then ranks companies on cash flow to debt, return on equity, dividend yield and dividend growth. The result is a fund tilted toward value and profitability that pays three times VOO’s yield and has trailed VOO by two points a year since SCHD launched in October 2011.
Quick answer
VOO for a core holding: it costs half as much, owns the whole large-cap market, and creates less taxable income. SCHD is a reasonable tilt toward dividend-paying value stocks, best held in an IRA or 401(k). From October 20, 2011 to September 30, 2026, $10,000 grew to $81,803 in VOO and $62,852 in SCHD. SCHD fell much less in 2022 and is ahead in 2026, so the gap mostly records which style led over this window.
| VOO | SCHD | |
|---|---|---|
| Index | S&P 500 | Dow Jones U.S. Dividend 100 |
| Expense ratio | 0.03% | 0.06% |
| Holdings | 505 | 102 |
| Top 10 holdings | 38% of the fund | 41% of the fund |
| Largest sectors | Information technology 37% | Consumer staples 20%, health care 19%, energy 15% |
| Trailing 12-month yield | 1.06% | 3.24% |
| Annual return since Oct 2011 | 15.10% | 13.09% |
| Annual return, 10 years | 15.30% | 12.45% |
| Volatility | 13.9% | 13.6% |
| 2022 return | -18.2% | -3.2% |
| Worst decline | -34.0% (2020) | -33.4% (2020) |
| Correlation of monthly returns | 0.84 | |
Vanguard and Schwab fund pages, read October 25, 2026. Returns, volatility, declines and correlation are Summitward calculations from daily prices and distributions, October 20, 2011 to September 30, 2026.
What each fund owns
SCHD is mostly a reweighting of companies VOO already holds. On October 13, 2026 holdings, 95% of SCHD by weight was in S&P 500 stocks, yet the two funds overlapped by only 7.7% by weight, because VOO puts its largest weights in companies SCHD excludes. None of the nine companies in VOO’s top ten is in SCHD: Amazon and Tesla pay no dividend, Alphabet and Meta began paying in 2024, and Nvidia, Apple, Microsoft, Broadcom and Eli Lilly yield too little to make the index’s cut to its higher-yielding half. Our VOO and SCHD overlap guide explains what that 7.7% figure measures.
The sector mix follows from the screen. SCHD’s three largest sectors at September 30, 2026 were consumer staples, health care and energy, together 55% of the fund, with information technology at 12%. In the S&P 500, information technology alone was 37%. A Fama-French regression of SCHD’s monthly returns loads positively on value, profitability and conservative investment, which is the statistical description of the same tilt.
What the record shows
VOO beat SCHD in 10 of the 14 full calendar years from 2012 through 2025. SCHD’s four wins were 2013, by half a point, and three years when value stocks led: 2016, 2021 and 2022. In 2022 SCHD lost 3.2% while VOO lost 18.2%. SCHD then trailed by 22, 13 and 13 points in 2023, 2024 and 2025, and through September 2026 it was ahead again, 21.5% to 12.7%.
Their volatility over the whole period was nearly identical, 13.6% for SCHD and 13.9% for VOO, and both fell about a third in the March 2020 crash. SCHD’s lower losses came in a specific kind of market, one where expensive growth stocks fell and cheaper, steadier companies held up. A monthly correlation of 0.84 means the two funds move together most of the time; it is high for two stock funds with this little overlap by weight.
Taxes in a brokerage account
SCHD’s 3.24% yield creates about three times VOO’s taxable income each year. At the top federal rate of 23.8%, taxes on distributions cut SCHD’s ten-year return by 0.90 points a year and VOO’s by 0.45. That overstates the lasting cost, because a lower-yield fund owes more capital-gains tax when it is sold. Our SCHD after-tax analysis holds the pretax return fixed and measures the difference: on SCHD’s actual payouts since 2011, 0.10 points a year at a 15% rate if everything is sold at the end, and 0.25 points if the shares are never sold. Both funds’ dividends are almost all qualified: 98.5% of SCHD’s and 97.2% of VOO’s in 2025.
In an IRA, 401(k) or HSA none of this applies, and the choice rests on what the funds own.
Who should pick which
Pick VOO if you
- Want one fund that owns the whole U.S. large-cap market.
- Are investing in a taxable account and do not need the income.
- Do not want a style bet that can trail for several years.
Pick SCHD if you
- Want a deliberate tilt toward profitable, dividend-paying value stocks.
- Hold it in a tax-advantaged account, or pay 0% on qualified dividends.
- Will stay with it through years like 2023, when it trailed by 22 points.
Owning both is mostly owning VOO with extra weight on 100 of its dividend payers. If you want a value tilt, our SCHD guide covers funds that target value and profitability directly, and VOO vs SCHD vs QQQ adds the growth side of the comparison.
Sources
- Vanguard, VOO fund page (expense ratio, 505 stocks and returns as of September 30, 2026); Vanguard 2025 qualified dividend income table. S&P 500 top-ten and sector weights from the iShares IVV holdings file, October 22, 2026, used as the index proxy.
- Schwab Asset Management, SCHD fund page (holdings October 22, 2026; sectors, yield and returns September 30, 2026) and 2025 qualified dividend report; S&P Dow Jones Indices, Dow Jones Dividend Indices Methodology.
- Summitward calculations: script and data; overlap and factor loadings from the VOO-SCHD overlap study.
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