SCHD vs. VOO: Which ETF is the Best Core Holding?
- SCHD and VOO are two of the most widely held U.S. equity ETFs.
- This year’s volatility shines a light on each fund’s suitability for client portfolios.
Two of the most widely held U.S. equity ETFs—the Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard S&P 500 ETF (VOO)—have taken different paths amid 2025’s market volatility and economic uncertainty, shining a light on their roles in portfolio construction.
Amid fears of an escalating trade war and signs of a slowing global economy, many advisors and investors are reevaluating their core holdings as diverging performance provides a reminder that not all U.S. large-cap exchange-traded funds are built the same.
SCHD, which holds a focused portfolio of high-quality, dividend-paying U.S. stocks, has demonstrated relative stability. While it's not immune to downturns, exposure to consumer defensive stocks has helped cushion the blow from broader market declines.
Meanwhile, VOO, which mirrors the S&P 500 index and has significant exposure to mega-cap technology companies, offers greater potential for long-term growth but has faced more short-term downside pressure.
For portfolio construction and maintenance, now is a good time to evaluate or revisit the suitability of SCHD and VOO as core holdings to help investors and financial advisors determine which, if not both, are appropriate based on a portfolio’s goals.
As of Tuesday’s market close, SCHD has declined roughly 6% in 2025 while VOO was down nearly 10%.
SCHD vs. VOO: Key Metric Comparison
| Metric | SCHD | VOO |
| Assets Under Management | $65.8B | $573.1B |
| Expenses | 0.06% | 0.03% |
| Yield | 3.74% | 1.3% |
| Year-to-Date Return | -6.1% | -9.8% |
| One-Year Return | 2.6% | 6.9% |
| Three-Year Return | 3.1% | 8.9% |
| Five-Year Return | 13.3% | 15.3% |
| 10-Year Return | 10.2% | 11.6% |
Source: etf.com data as of April 22, 2025. Past performance is no guarantee of future results.
SCHD vs. VOO: How They Invest
SCHD focuses on high-quality dividend-paying stocks for income and stability, while VOO tracks the entire S&P 500 for broad, growth-oriented market exposure.
SCHD: Dividend-Paying Blue Chips
SCHD tracks the Dow Jones U.S. Dividend 100 Index, investing in high-quality U.S. companies with a strong history of paying and growing dividends. The fund emphasizes profitability, dividend sustainability and financial strength.
Key sectors typically include consumer staples, energy and healthcare. The ETF generally holds around 100 stocks and rebalances annually.
VOO: Tech-Heavy U.S. Equity Exposure
VOO tracks the S&P 500, providing exposure to 500 of the largest publicly traded U.S. companies. Its holdings are market-cap weighted, with heavy allocations to mega-cap tech names like Apple Inc. (AAPL), Microsoft Corp. (MSFT) and Nvidia Corp. (NVDA).
Although VOO tilts toward the tech sector, it is considered a barometer of the U.S. stock market and offers diversification across all 11 GICS sectors.
Tip: Use etf.com's fund comparison tool to compare SCHD to VOO.
SCHD vs. VOO: Who Should Invest?
While either ETF can work well as a core holding in a diversified portfolio, one ETF may be better-suited than the other, depending on the investor's needs and risk tolerance.
SCHD: Income-Oriented and Conservative Investors
Investors looking for a combination of income and relative stability may prefer SCHD. It’s ideal for retirees or conservative investors who value dividend income and want lower volatility compared to growth-heavy indexes. SCHD is also attractive to those seeking a tax-efficient yield without the need to sell shares.
VOO: Growth-Oriented and Long-Term Investors
VOO is best suited for investors with a long-term time horizon and higher risk tolerance. Younger investors, or those focused on long-term capital appreciation, will benefit from VOO’s exposure to innovative and dominant U.S. corporations. Its growth potential, however, comes with more volatility, especially in short-term downturns.
Final Thoughts: Choosing the Right Core ETF
Both SCHD and VOO can serve as effective core holdings in a diversified portfolio, but they serve different purposes. SCHD provides a defensive, income-oriented foundation with the potential for moderate growth. VOO offers broader exposure and higher long-term growth potential but with more price volatility.
Financial advisors and self-directed investors must assess the overall portfolio objective, risk tolerance, and income needs to determine the right fit. For many, a blend of the two may strike the right balance between stability and growth in today’s uncertain market environment.
