Wealthy PotSCHB vs SCHD: Schwab's Whole Market or Its 100-Stock Dividend Screen?
SCHB owns about 2,400 US companies weighted by size. SCHD owns about 100 dividend payers chosen by a yield-and-quality screen. Every stock in SCHD is also in SCHB, but together those stocks are only 7.1% of SCHB, by our calculation from both funds' May 2026 SEC holdings filings. So the two share very little in practice. SCHD's 30-day SEC yield was 3.37% against SCHB's 1.02%. SCHB costs half as much (0.03% against 0.06%) and returned 2.67 percentage points a year more over the ten years to 30 June 2026, because SCHD owns none of the largest technology companies. SCHB is a complete core holding. SCHD is a deliberate income tilt.
Table of Contents
The Short Answer
- Overlap: 7.1%. All 99 stocks in SCHD's 31 May 2026 filing were also in SCHB, making up 99.8% of SCHD. But they were only 7.1% of SCHB. That is our calculation from both funds' N-PORT filings for the same date.
- SCHB costs half as much. 0.03% against 0.06% in Schwab's prospectus: $3 against $6 a year per $10,000.
- SCHD pays more than three times the income. 30-day SEC yield on 1 October 2026: SCHD 3.37%, SCHB 1.02%.
- SCHB has the better long record. Ten years to 30 June 2026 at NAV: SCHB 15.04% a year, SCHD 12.37%. Five years: 12.30% against 8.51%.
- The latest year went the other way. SCHD led by 1.08 points over the year to 30 June 2026 and by 9.31 points over the year to 31 August 2026.
- SCHB's top ten are not in SCHD at all. Nvidia, Apple, Alphabet, Microsoft, Amazon, Broadcom, Meta, Tesla, Micron and Eli Lilly were 36.1% of SCHB in May 2026 and 0% of SCHD.
Every SCHD Stock Is in SCHB, but SCHD Is 7% of SCHB
SCHB holds roughly the largest 2,500 US companies, so any large dividend payer SCHD picks is already inside it. The two funds still look nothing alike, because the stocks SCHD holds at 3% to 7% each are a fraction of a percent each in SCHB.
| Overlap measure, 31 May 2026 | Result |
|---|---|
| SCHD holdings also in SCHB | 99 of 99 |
| Share of SCHD's weight in stocks SCHB also owns | 99.8% |
| Share of SCHB's weight in stocks SCHD also owns | 7.1% |
| Overlap (sum of the smaller weight in each shared stock) | 7.1% |
| Stock | Weight in SCHB | Weight in SCHD |
|---|---|---|
| Qualcomm | 0.37% | 6.74% |
| Texas Instruments | 0.38% | 5.90% |
| UnitedHealth Group | 0.47% | 5.09% |
| Coca-Cola | 0.42% | 3.96% |
| Merck | 0.40% | 3.86% |
| Chevron | 0.47% | 3.83% |
| Verizon | 0.28% | 3.65% |
| Procter & Gamble | 0.46% | 3.55% |
Going the other way, 92.75% of SCHB is in about 2,300 companies SCHD does not hold. The largest are Nvidia (7.02%), Apple (6.26%), Alphabet (5.44%), Microsoft (4.57%), Amazon (3.62%) and Broadcom (2.90%).
How Each Index Picks Its Stocks
SCHB tracks the Dow Jones U.S. Broad Stock Market Index. Schwab's prospectus says it "includes the largest 2,500 publicly traded U.S. companies for which pricing information is readily available" and is "float-adjusted market capitalization weighted." On 31 August 2025 it held 2,457 stocks. The fund uses sampling rather than owning every index member. There is no dividend test.
SCHD tracks the Dow Jones U.S. Dividend 100 Index. The prospectus describes the steps:
- Start from the Dow Jones U.S. Broad Market Index, "excluding real estate investment trusts (REITs), master limited partnerships, preferred stocks and convertibles."
- Keep stocks that "have sustained at least 10 consecutive years of dividend payments, have a minimum float-adjusted market capitalization of $500 million USD and meet minimum liquidity criteria."
- From "the highest dividend yielding stocks," pick 100 using four measures: "cash flow to total debt, return on equity, dividend yield and 5-year dividend growth rate."
- Cap each stock at 4.0% and each sector at 25% at each rebalance. The index is "reviewed annually and rebalanced quarterly."
Note the rule is ten years of paying dividends, not ten years of raising them. Because selection starts from the highest yielders, large companies with small or no dividends do not make the cut in practice: SCHD's May filing held no Nvidia, Apple, Microsoft, Amazon or Alphabet. Positions can drift above the 4% cap between rebalances, as Qualcomm's 6.74% in May shows.
SCHB vs SCHD Side by Side
| SCHB | SCHD | |
|---|---|---|
| Name | Schwab U.S. Broad Market ETF | Schwab U.S. Dividend Equity ETF |
| Index | Dow Jones U.S. Broad Stock Market Index | Dow Jones U.S. Dividend 100 Index |
| Expense ratio | 0.03% | 0.06% |
| Prospectus cost of $10,000 over 10 years | $39 | $77 |
| Holdings (1 Oct 2026) | 2,397 | 102 |
| Top 10 holdings, % of assets (1 Oct 2026) | 34.7% | 41.3% |
| 30-day SEC yield (1 Oct 2026) | 1.02% | 3.37% |
| 12-month distribution yield (31 Aug 2026) | 1.02% | 3.00% |
| Portfolio turnover (31 Aug 2026) | 3.03% | 39.60% |
| Total net assets (2 Oct 2026) | $44.9 billion | $108.7 billion |
| Inception | 3 November 2009 | 20 October 2011 |
Where the Two Funds Differ
Both Schwab pages report GICS sectors as of the same date, so they compare directly.
| Sector (GICS), 30 June 2026 | SCHB | SCHD |
|---|---|---|
| Information Technology | 35.81% | 9.23% |
| Financials | 12.09% | 10.05% |
| Industrials | 10.37% | 11.55% |
| Health Care | 9.43% | 20.72% |
| Consumer Discretionary | 9.30% | 7.74% |
| Communication Services | 9.10% | 6.15% |
| Consumer Staples | 4.32% | 20.38% |
| Energy | 3.12% | 14.07% |
| Real Estate | 2.21% | 0.00% |
| Utilities | 2.16% | 0.11% |
| Materials | 2.09% | 0.00% |
The technology gap is 26.6 percentage points. SCHD fills it with health care, consumer staples and energy: together 55.2% of SCHD against 16.9% of SCHB. These are mature, cash-generating businesses such as Coca-Cola, Procter & Gamble, Chevron, ConocoPhillips, Merck and Amgen. SCHD is also more concentrated, with its ten largest positions at 41.3% of assets against 34.7% for SCHB.
Turnover differs too. Schwab reports SCHD's portfolio turnover at 39.60% for the year to 31 August 2026, against 3.03% for SCHB, consistent with an index that is reconstituted annually and rebalanced quarterly.
Returns: It Depends Which Year You Ask
| Average annual return at NAV | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| SCHB, to 30 June 2026 | 23.00% | 20.44% | 12.30% | 15.04% |
| SCHD, to 30 June 2026 | 24.08% | 13.52% | 8.51% | 12.37% |
| SCHD minus SCHB | +1.08 | -6.92 | -3.79 | -2.67 |
| SCHB, to 31 August 2026 | 20.14% | 20.65% | 11.75% | 14.81% |
| SCHD, to 31 August 2026 | 29.45% | 16.18% | 10.01% | 13.17% |
| SCHD minus SCHB | +9.31 | -4.47 | -1.74 | -1.64 |
Over three, five and ten years SCHB led on both dates. Over one year SCHD led on both dates, by a wide margin in August. Two months moved the one-year gap by more than eight points, which is a reminder of how much any single year depends on what happened to a few sectors.
| Hypothetical $10,000 held for 10 years | Ending value |
|---|---|
| At SCHB's 10-year return to 30 Jun 2026 (15.04%) | $40,597 |
| At SCHD's 10-year return to 30 Jun 2026 (12.37%) | $32,100 |
What SCHD's Income Costs in a Taxable Account
Schwab publishes SEC-standardized after-tax returns for both funds on the same date. Comparing them shows how much tax on distributions took each year at the highest federal rates.
| Annualized at NAV, to 30 June 2026 | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| SCHB before taxes | 23.00% | 20.44% | 12.30% | 15.04% |
| SCHB after taxes on distributions | 22.55% | 20.03% | 11.90% | 14.57% |
| SCHD before taxes | 24.08% | 13.52% | 8.51% | 12.37% |
| SCHD after taxes on distributions | 22.68% | 12.42% | 7.54% | 11.45% |
Over ten years SCHD lost 0.92 points a year to tax on distributions and SCHB 0.47, our arithmetic. On a $100,000 position, the current SEC yields imply about $3,370 a year of reportable income from SCHD against about $1,020 from SCHB, assuming the yields hold. In an IRA, Roth IRA or 401(k) that income is not taxed as it arrives, which is where SCHD's yield costs nothing extra. Check your 2026 tax bracket before holding SCHD in a taxable account.
Which One Fits You
One fund for US stocks: SCHB. It covers large, mid and small companies for 0.03%, has the better long-term record, and pays less taxable income along the way.
You want spendable income, ideally in an IRA: SCHD. A 3.37% SEC yield from about 100 established dividend payers suits someone drawing income. Dividends are not guaranteed and can be cut.
Holding both. Because SCHD is only 7.1% of SCHB, pairing them is a real tilt: you add weight to health care, staples and energy and reduce your share in the largest technology companies. Decide the split in advance, for example a core of SCHB with a smaller SCHD sleeve, so one strong or weak year does not decide it for you.
Schwab account. Both are Schwab ETFs and trade like any stock, so they fit a Schwab, Fidelity or other brokerage account the same way.
Switching. Selling a long-held SCHD position at a gain in a taxable account to buy SCHB realizes that gain now. Redirecting new contributions avoids it.
Similar decisions with Vanguard funds: SCHD vs VTI and SCHD vs VOO. If you are choosing a broad-market core, see SCHB vs VTI and SCHB vs VOO.
Sources & Methodology
- Schwab Strategic Trust, Form 485BPOS filed 22 December 2025: fee tables (SCHB 0.03%, SCHD 0.06%), cost examples and both index descriptions.
- Schwab Strategic Trust, supplement dated 11 June 2026: restated advisory-fee table confirming 0.03% and 0.06%.
- Schwab SCHB fund page and SCHD fund page, read 5 October 2026: yields, holdings, sectors, returns, after-tax returns, turnover and net assets.
- SCHB Form N-PORT and SCHD Form N-PORT, both for the period ended 31 May 2026: holdings behind the overlap.
How the overlap was computed. We matched both N-PORT holdings lists and summed, for each shared stock, the smaller of its two weights, the same method as our Portfolio Overlap Checker. Both filings are for the same date.
Notes and limits. Schwab had not posted 30 September 2026 returns when we checked, so the latest figures are to 31 August 2026. SCHD's holdings count varies around its 100-stock index (99 in the May filing, 102 on 1 October). Returns on the two dates are shown in separate rows and never mixed.
This article is for general education and is not investment, tax or legal advice. Fund data changes daily, dividends are not guaranteed, and past performance does not guarantee future results. All investing carries the risk of loss. Figures were checked against the sources above on 5 October 2026. Confirm current figures with Schwab and consider speaking with a licensed financial professional before acting.
FAQ: SCHB vs SCHD
Is SCHD better than SCHB?
Over the long run it has returned less: 12.37% a year at NAV over ten years to 30 June 2026, against 15.04% for SCHB. It led over the latest year and pays much more income, 3.37% SEC yield against 1.02%.
Should I hold both SCHB and SCHD?
You can. Their overlap is only 7.1% by our calculation, so SCHD changes your mix meaningfully, adding health care, staples and energy and reducing large technology. Treat it as a tilt and set the size on purpose.
How much do SCHB and SCHD overlap?
7.1%. Every SCHD stock is in SCHB, but those stocks were only 7.1% of SCHB in both funds' 31 May 2026 filings.
Which is cheaper?
SCHB at 0.03% a year, against 0.06% for SCHD: $3 against $6 per $10,000.
Why does SCHD own no Apple or Microsoft?
Its index picks from the highest-yielding stocks with at least ten years of dividend payments, then ranks them on cash flow to debt, return on equity, yield and dividend growth. None of SCHB's ten largest holdings made SCHD in May 2026.
Is SCHD good for a taxable account?
It is less tax-efficient than SCHB. Schwab's after-tax figures show SCHD losing 0.92 points a year to taxes on distributions over ten years to 30 June 2026, against 0.47 for SCHB, at the highest federal rates.
Does SCHB include small companies?
Yes. Its index covers the largest 2,500 US companies, so it reaches into mid and small caps. It held 2,397 stocks on 1 October 2026.
Cite This Page
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"SCHB vs SCHD: Schwab's Whole Market or Its 100-Stock Dividend Screen?" Wealthy Pot, 2026. https://wealthypot.com/schb-vs-schd/
Related comparisons: SCHD vs VTI · SCHD vs VOO · SCHB vs VOO · SCHB vs VTI · VYM vs SCHD · SCHD vs VTV · All ETF comparisons
