SCHD vs. VOO: Which One Will Make You Richer?
Key Points
The Vanguard S&P 500 ETF (VOO) has ridden the tech stock rally to big returns over the past several years.
The rotation out of tech benefitted the Schwab U.S. Dividend Equity ETF (SCHD), helping make it a big winner in 2026.
Given where near-term conditions are heading, it's time for investors to consider defensive equities as the better play.
- 10 stocks we like better than Vanguard S&P 500 ETF ›
Dividend stocks are back in favor again. That means it's time to consider dividend ETFs you may have ignored in recent years.
The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is the top-performing U.S. dividend ETF so far in 2026. Its strategy of requiring at least 10 consecutive years of dividend payments, strong balance sheet fundamentals, and above-average yields produces a "best of the best" stock portfolio that has delivered for shareholders.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
That strategy aligns with what investors are looking for right now. It may even be a better investment than the Vanguard S&P 500 ETF (NYSEMKT: VOO) at the moment.
Image source: Getty Images.
SCHD vs. VOO: The numbers
| Metric | VOO | SCHD |
|---|---|---|
| Expense ratio | 0.03% | 0.06% |
| No. of holdings | 504 | 104 |
| Assets under management (AUM) | $817.5 billion | $87.5 billion |
| Dividend yield | 1.2% | 3.3% |
| 1-year total return | 36.5% | 26.9% |
| 10-year average annual return | 14.1% | 12.4% |
Data sources: YCharts, SCHD website, VOO website.
The S&P 500's outperformance over the past decade has largely been a result of the bull market in tech stocks. But the Schwab U.S. Dividend Equity ETF's outperformance in 2026 comes from rotation out of those previous winners. As the economy slows, the geopolitical backdrop remains tense, and inflation rises, it's probably going to make investors less likely to push back into growth stocks over the near term.
Over the next year or so, conditions favor the continued outperformance of defensive and dividend-paying stocks. As we saw in 2022, any environment that brings a sharp slowdown in activity usually sees conservative equities perform better. The Schwab U.S. Dividend Equity ETF is likely the better play.
Over the longer term, say a decade or more, the Vanguard S&P 500 ETF probably wins out. Its overweights to tech and growth stocks are likely to perform better despite the added volatility along the way.
Should you buy stock in Vanguard S&P 500 ETF right now?
Before you buy stock in Vanguard S&P 500 ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard S&P 500 ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $524,786!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,236,406!*
Now, it’s worth noting Stock Advisor’s total average return is 994% — a market-crushing outperformance compared to 199% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of April 21, 2026.
David Dierking has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
Recommended Articles
