Over the last 10 years, $VOO has the better total return: 15.29% a year versus 12.44% for $SCHD, at NAV through September 30, 2026, per Vanguard and Schwab. $VOO also wins over 3 and 5 years. But over the last 12 months $SCHD was way ahead, 23.36% versus 15.70%, and it pays roughly three times the income: a 3.24% distribution yield versus about 1.1% for $VOO.
This is probably the most argued about matchup in all of dividend investing. One camp says just buy the S&P 500 and stop overthinking it. The other camp wants a fat, growing dividend check they never have to sell shares to get. I've been a dividend investor for over 10 years, so you can guess where my heart is. But the scoreboard doesn't care about feelings. Let's look at it.
$SCHD vs $VOO: the total return scoreboard
These are average annual total returns at NAV, straight from each issuer, for periods ended September 30, 2026. Total return means price change plus every dividend reinvested. It's the only fair way to compare a dividend fund to an index fund.
| ETF | 1 year | 3 years | 5 years | 10 years | Since inception | Expense ratio | Yield |
|---|---|---|---|---|---|---|---|
| $SCHD | 23.36% | 15.44% | 9.48% | 12.44% | 13.11% (Oct 2011) | 0.06% | 3.24% |
| $VOO | 15.70% | 22.85% | 13.75% | 15.29% | 14.94% (Sep 2010) | 0.03% | ~1.1% |
Annualized returns at NAV for periods ended September 30, 2026. Sources: Schwab Asset Management ($SCHD fund page) and Vanguard ($VOO fact sheet). $SCHD yield is Schwab's trailing 12 month distribution yield as of September 30, 2026; $VOO yield is from ETFTotalReturns.com data as of October 23, 2026. Since inception figures cover different start dates, so don't compare that column directly. Past performance does not guarantee future results.
So the answer to "which is better, $SCHD or $VOO" depends on the window you pick. $VOO took 3 of the 4 standard periods. $SCHD crushed the most recent one. That's exactly why both camps think they're right.
What $10,000 turned into
Percentages are hard to feel, so here's the same data in dollars, using each fund's annualized return with dividends reinvested:
- 10 years in $VOO: about $41,500
- 10 years in $SCHD: about $32,300
- 5 years in $VOO: about $19,000
- 5 years in $SCHD: about $15,700
Over a decade that's a gap of roughly $9,200 on every $10,000 invested. That's real money. Anyone who tells you $SCHD "beats the market" over the long run is not looking at the last 10 years.
But here's the other side. Through the first nine months of 2026, $SCHD returned 21.46% while $VOO returned 12.72%. Leadership rotates. It always has.
Why the returns are so different
These two funds own very different businesses. That's the whole story.
$VOO is a tech fund now (mostly)
$VOO holds all 500 or so S&P 500 companies, weighted by size. At the end of September, information technology was 39.7% of the fund, and the top 10 holdings were 40.6%, led by $NVDA (8.4%), $AAPL (7.4%) and $MSFT (5.8%), per Vanguard. When the giants run, $VOO runs. That's what powered the 22.85% a year over the last 3 years.
$SCHD owns the boring cash machines
$SCHD tracks the Dow Jones U.S. Dividend 100 Index: about 100 stocks picked for dividend history, cash flow, return on equity and yield. Its biggest sectors at the end of September were consumer staples (19.97%), health care (19.20%) and energy (15.38%). Tech was just 12.22%. It's a value fund with a quality screen, and it mostly skips the mega cap growth names that have driven the index.
This is the part most people miss. $SCHD didn't "underperform" because it's a bad fund. It underperformed because it deliberately doesn't own the stuff that went up the most. When value and dividend stocks lead, like they did over the last year, it flips.
Turnover is another tell
$VOO's turnover was 2.4% last fiscal year. $SCHD's was 40.61% as of September 30, 2026, because its index is reconstituted every year and swaps names in and out based on its screens. Different machine, different results.
The income gap: $SCHD vs $VOO dividends
Now the part dividend investors actually care about. On a $100,000 position:
- $SCHD at 3.24%: about $3,240 a year in dividends
- $VOO at about 1.1%: about $1,100 a year
Both pay quarterly. $SCHD's dividends have generally been qualified, which matters a lot in a taxable account. If you're living off the portfolio, $SCHD gets you there with a lot fewer dollars invested.
The index fund crowd will say: just sell 3% of your $VOO each year and you've made your own dividend. And mathematically, with a higher total return, that can work. I just know how I think. I'd rather have the income show up on its own than decide every month how many shares to sell, especially in a year when the market is down 20%. Selling shares in a crash is the thing that wrecks retirement plans. Living off dividends lets you leave the shares alone. That peace of mind is worth something to me, even if it costs some total return.
If you want to see how a growing dividend stream compounds over time, DividendProjection.com projects it year by year.
How I'd actually think about $SCHD vs $VOO
- Long runway, no income need? $VOO has the stronger record and the lower fee (0.03% vs 0.06%). Hard to argue with that for an accumulator.
- Need income now, or soon? $SCHD pays about three times more cash and leans into steadier, cash generating businesses.
- Want both? They overlap less than people think, because $SCHD barely owns big tech. Holding both is a reasonable way to get growth and income without doubling up on the same names.
- Judge on total return, live on cash flow. Yield is what you get paid. Total return is what you actually earned. Track both.
You can line up any two funds yourself with the ETF total return comparison tool, or see the live matchup on our $SCHD vs $VOO comparison page. If you're weighing other dividend funds against the index, check $DGRO vs $VOO and $SCHG vs $VOO for the growth side. And for comparing yields, price decay and ratings across 130+ income ETFs at once, I built TopDividendETFsPRO for exactly that.
The risks on each side
$VOO concentration risk. Ten stocks are about 40% of the fund and tech is nearly 40%. That's not the diversified, 500 stock basket people picture. If mega cap tech has a rough few years, $VOO feels all of it.
$SCHD style risk. Value and dividend stocks can lag for long stretches. The 5 year return of 9.48% a year shows what that looks like. You need the patience to sit through it.
$SCHD's index changes every year. The annual reconstitution can push the fund into or out of sectors fast, and you don't control it.
One year numbers lie. $SCHD went from laggard to leader in 12 months. Don't switch funds because of whatever just won.
The takeaway
On pure total return, $VOO has been the better fund over 3, 5 and 10 years, and it's cheaper. On income, $SCHD wins easily and has been the stronger fund over the last year. If I'm building income to live on, $SCHD is the kind of core holding I want. If I'm 25 and just stacking, $VOO is tough to beat.
The worst move is treating it as a religion. Pick the fund that matches what you need the money to do, keep fees low, and judge it on total return. For more dividend fund matchups, see my $SCHD vs $DGRO vs $VIG vs $NOBL vs $VYM total return breakdown. Want to explore further? TopDividendETFs.com ranks the top 100 dividend ETFs, GrowthETFs.com covers the growth side, and TopDividendTools.com has free dividend calculators.
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Disclaimer: This post is for educational and informational purposes only. It is not financial advice or a recommendation to buy or sell any security, and I am not a financial advisor. Do your own research and consider a licensed professional before investing. Performance and portfolio data is from Schwab Asset Management and Vanguard as of September 30, 2026, and the $VOO yield is from ETFTotalReturns.com data as of October 23, 2026. Data can be inaccurate or change. Past performance does not guarantee future results. Investing involves risk, including loss of principal.