Wealthy PotSCHD vs SPY: The Dividend Screen Is Cheaper, the S&P 500 Has Returned More
SCHD and SPY overlap by only 7.6%, by our calculation from SEC holdings filings. Almost every SCHD stock (94.9% of its weight) is also in the S&P 500, but those stocks are a small slice of the index, and SCHD owns none of Nvidia, Apple, Alphabet, Microsoft, Amazon, Broadcom or Meta. SCHD pays about three and a half times the income (a 3.37% SEC yield against 0.96%, both on 1 October 2026) and, perhaps surprisingly, charges less: 0.06% against SPY's 0.0945%. SPY has the better long-run record: 15.35% a year over the ten years to 30 June 2026, against 12.37%.
Table of Contents
The Short Answer
- Overlap: 7.6%. SCHD is 94.9% S&P 500 stocks, but those 46 shared names are only 7.6% of the index. Our calculation from N-PORT filings for 31 May 2026 (SCHD) and 30 June 2026 (S&P 500 weights).
- Fees: SCHD 0.06%, SPY 0.0945%. That is $6 against $9.45 a year per $10,000.
- Income: SCHD 3.37%, SPY 0.96% 30-day SEC yield, both as of 1 October 2026.
- Returns: SPY ahead over three, five and ten years. To 30 June 2026 at NAV, SPY returned 15.35% a year over ten years and SCHD 12.37%. SCHD led over the latest year on both 30 June and 31 August 2026.
- Taxes: SCHD's income costs more. Over ten years, tax on distributions took 0.92 points a year off SCHD's return and 0.44 off SPY's.
- If you hold for years, SPY is not the cheapest S&P 500 fund. VOO charges 0.03% and SPYM 0.02% for the same index.
How Much SCHD and SPY Overlap
SPY is a unit investment trust and does not file Form N-PORT, so our Portfolio Overlap Checker uses S&P 500 weights from iShares' IVV filing for 30 June 2026. SPY holds "as many of the Index Securities as is practicable," in its prospectus's words, so the index weights are a close stand-in. SCHD's filing is for 31 May 2026.
| Overlap measure | Result |
|---|---|
| SCHD holdings that are in the S&P 500 | 46 of 99 |
| Share of SCHD's weight in S&P 500 stocks | 94.9% |
| Share of the S&P 500's weight in SCHD stocks | 7.6% |
| Overlap (sum of the smaller weight in each shared stock) | 7.6% |
The 53 SCHD holdings outside the S&P 500 add up to just 4.8% of the fund. They are smaller companies such as East West Bancorp, Watsco, Fidelity National Financial and HF Sinclair, each under half a percent.
| Stock | Weight in SCHD | Weight in the S&P 500 |
|---|---|---|
| Qualcomm | 6.74% | 0.30% |
| Texas Instruments | 5.90% | 0.42% |
| UnitedHealth | 5.09% | 0.58% |
| Coca-Cola | 3.96% | 0.49% |
| Merck | 3.86% | 0.49% |
| Chevron | 3.83% | 0.48% |
| Procter & Gamble | 3.55% | 0.53% |
| Home Depot | 3.36% | 0.54% |
| Nvidia | 0% | 7.51% |
| Apple | 0% | 6.58% |
| Alphabet (both classes) | 0% | 5.83% |
| Microsoft | 0% | 4.29% |
That is the whole comparison in one table. SCHD buys a slice of the S&P 500's dividend payers at six to more than twenty times their index weight and leaves out the largest companies entirely. The 454 S&P 500 stocks SCHD does not own are 92.2% of the index.
SCHD vs SPY Side by Side
| SCHD | SPY | |
|---|---|---|
| Full name | Schwab U.S. Dividend Equity ETF | SPDR S&P 500 ETF Trust |
| Index | Dow Jones U.S. Dividend 100 Index | S&P 500 |
| Structure | Open-end fund (ETF) | Unit investment trust (ETF) |
| Expense ratio | 0.06% | 0.0945% |
| Holdings | 102 lines (2 Oct 2026) | 505 (1 Oct 2026) |
| Top 10 weight | 41.62% (2 Oct 2026) | 36.31% (30 Jun 2026) |
| 30-day SEC yield | 3.37% (1 Oct 2026) | 0.96% (1 Oct 2026) |
| Distributions | Quarterly | Quarterly |
| Net assets | $108.67 billion (2 Oct 2026) | $815.33 billion (2 Oct 2026) |
| Inception | 20 October 2011 | 22 January 1993 |
Two details on SPY's side. Its fee includes a trustee waiver that runs "until February 1, 2027," per the prospectus. And because it is a unit investment trust, SPY may not lend its securities, and dividends it receives sit "in a non-interest-bearing account" until they are paid out each quarter. Neither is a large cost, but both are reasons the other S&P 500 funds compared in SPY vs VOO and IVV vs SPY exist.
Where the Two Funds Differ
Both issuers use the GICS sector scheme, and both publish sector weights as of 30 June 2026, so this table compares directly.
| GICS sector, 30 June 2026 | SCHD | SPY | Difference |
|---|---|---|---|
| Information Technology | 9.23% | 38.03% | -28.80 |
| Health Care | 20.72% | 8.89% | +11.83 |
| Consumer Staples | 20.38% | 4.57% | +15.81 |
| Energy | 14.07% | 2.98% | +11.09 |
| Industrials | 11.55% | 8.93% | +2.62 |
| Financials | 10.05% | 11.76% | -1.71 |
| Consumer Discretionary | 7.74% | 9.31% | -1.57 |
| Communication Services | 6.15% | 9.68% | -3.53 |
| Utilities | 0.11% | 2.20% | -2.09 |
| Real Estate | none | 1.83% | -1.83 |
| Materials | none | 1.83% | -1.83 |
SCHD trades almost 29 points of technology for consumer staples, health care and energy. That is a product of its rules, not a manager's view. Schwab's prospectus says every eligible stock "must have sustained at least 10 consecutive years of dividend payments," and the index then picks the highest yielders on four measures: "cash flow to total debt, return on equity, dividend yield and 5-year dividend growth rate." Most large technology companies pay little or nothing, or started paying too recently. REITs are excluded outright, which is why real estate is zero.
The other structural difference is concentration. The S&P 500 weights by market value, so its ten largest stocks were 36.31% of SPY on 30 June 2026. SCHD caps each stock at 4.0% at each rebalance, but with only 100 names its top ten still came to 41.62% on 2 October 2026. Neither fund is spread thin at the top. SCHD's top ten are ten different companies in five sectors. SPY's are mostly large technology and communication companies.
Returns, Yield and Tax Drag
| Average annual return at NAV | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| SCHD, to 30 Jun 2026 | 24.08% | 13.52% | 8.51% | 12.37% |
| SPY, to 30 Jun 2026 | 22.15% | 20.46% | 13.26% | 15.35% |
| SCHD minus SPY | +1.93 | -6.94 | -4.75 | -2.98 |
| SCHD, to 31 Aug 2026 | 29.45% | 16.18% | 10.01% | 13.17% |
| SPY, to 31 Aug 2026 | 20.21% | 20.89% | 12.65% | 15.22% |
| SCHD minus SPY | +9.24 | -4.71 | -2.64 | -2.05 |
Over the past year SCHD has been the winner, and by a wide margin on the August date. Over three, five and ten years the S&P 500 led on both dates. A $10,000 lump sum at SPY's ten-year rate to 30 June 2026 would have grown to about $41,704; at SCHD's, about $32,100. That is hypothetical arithmetic by Wealthy Pot with no contributions, costs or taxes, not a forecast.
The yield gap matters most if you spend the income. On $100,000, a 3.37% SEC yield is about $3,370 a year and 0.96% is about $960 (our arithmetic, assuming the yields hold). But in a taxable account that income is taxed whether you spend it or not:
| To 30 June 2026, at NAV | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| SCHD after taxes on distributions | 22.68% | 12.42% | 7.54% | 11.45% |
| SCHD tax drag | 1.40 | 1.10 | 0.97 | 0.92 |
| SPY after taxes on distributions | 21.74% | 20.08% | 12.88% | 14.91% |
| SPY tax drag | 0.41 | 0.38 | 0.38 | 0.44 |
SCHD lost about twice as much to tax as SPY at every horizon. Inside a retirement account, that difference disappears.
This is educational information, not personalized investment advice. Past performance does not guarantee future results, and all investing carries the risk of loss.
Which One Fits You
For a core holding you will keep for decades, the S&P 500 is the stronger default. It owns the whole large-cap market, it has the better ten-year record, and it is more tax-efficient. But if you are buying and holding, consider a cheaper S&P 500 fund: VOO charges 0.03% and SPYM 0.02%, against SPY's 0.0945%. SPY's strengths are trading volume and its options market, which matter to traders more than to buy-and-hold investors.
SCHD fits when you want income you plan to spend. A retiree drawing cash from a portfolio gets about three and a half times the yield, from companies with long dividend records. The lower technology weight is the point if you deliberately want less exposure to the largest growth stocks.
Put SCHD in a tax-sheltered account if you can. In an IRA, Roth IRA or 401(k) the extra 0.5 points a year of tax drag does not apply. In a taxable brokerage account, it is the strongest argument against SCHD.
Holding both is a tilt, not diversification. SCHD's stocks are almost all S&P 500 stocks already. Adding 20% SCHD to an S&P 500 core moves you toward staples, health care and energy and away from technology. Do it on purpose. Our SCHD vs VOO page covers the same choice with Vanguard's S&P 500 fund.
Switching has a tax cost. Selling a long-held taxable position realizes the gain today. Redirecting new contributions does not.
Sources & Methodology
- Schwab Strategic Trust Form 485BPOS filed 22 December 2025: SCHD's 0.06% fee, index rules and distribution schedule.
- Schwab SCHD fund page, read 5 October 2026: SEC yield, holdings, net assets, top ten, sectors, and before- and after-tax returns.
- SPDR S&P 500 ETF Trust Form 485BPOS filed 26 January 2026: the 0.0945% expense rate, fee waiver, unit investment trust structure, lending restriction and dividend handling.
- SPY fact sheet as of 30 June 2026 and the State Street SPY fund page: top ten, sectors, holdings, assets, SEC yield and returns.
- SPYM summary prospectus (0.02%) and Vanguard's VOO profile data (0.03%, as of 28 April 2026).
- Form N-PORT filings for SCHD (31 May 2026) and IVV (30 June 2026): the overlap, as the sum of the smaller weight of every shared holding.
Limits. SPY files no holdings report, so the overlap uses IVV's S&P 500 weights. The two holdings filings are a month apart. The top-ten figures come from different dates because each issuer publishes on its own schedule.
This article is for general education and is not investment, tax or legal advice. Fund data changes daily, index returns cannot be invested in directly, 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.
FAQ: SCHD vs SPY
Is SCHD better than SPY?
For total return over three, five and ten years to 30 June 2026, no: SPY returned 15.35% a year over ten years against SCHD's 12.37%. SCHD led over the latest year and pays far more income (3.37% vs 0.96% SEC yield). They do different jobs.
How much do SCHD and SPY overlap?
7.6%. SCHD holds 46 S&P 500 stocks that make up 94.9% of its weight, but only 7.6% of the index. Our calculation from N-PORT filings, using IVV's weights for the S&P 500.
Is SCHD cheaper than SPY?
Yes. SCHD's expense ratio is 0.06% and SPY's is 0.0945%. Other S&P 500 funds are cheaper than both: SPYM at 0.02% and VOO at 0.03%.
Does SCHD own Apple or Nvidia?
No. Neither appears in SCHD's holdings. SCHD's only technology holdings in its top names are Texas Instruments and Qualcomm.
Should I hold SCHD and SPY together?
You can. It tilts an S&P 500 portfolio toward dividend payers in staples, health care and energy. It does not add new markets, because almost every SCHD stock is already in the S&P 500.
Which is better in a taxable account?
SPY. Tax on distributions reduced its ten-year return by 0.44 points a year, against 0.92 for SCHD, on the issuers' own after-tax figures to 30 June 2026.
Which is better for retirement income?
SCHD pays more cash. A portfolio of SPY can produce income too, by selling shares, and has grown faster. Which approach suits you depends on whether you prefer spending dividends or selling shares.
Cite This Page
Journalists, educators and bloggers are welcome to cite this comparison. Please link back so readers can reach the underlying filings.
"SCHD vs SPY: The Dividend Screen Is Cheaper, the S&P 500 Has Returned More." Wealthy Pot, 2026. https://wealthypot.com/schd-vs-spy/
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