SCHG vs SCHD: Which One Is Better?
LAST UPDATED: May 11, 2023 | By Conrad Golly
The Schwab U.S. Dividend Equity ETF (SCHD) and the Schwab U.S. Large-Cap Growth ETF (SCHG) are both among the Top 100 ETFs. SCHD is a Schwab ETFs Large Value fund and SCHG is a Schwab ETFs Large Growth fund.
SCHG vs SCHD: For those who are unfamiliar, SCHG is a large-cap growth ETF that invests in stocks included in the Dow Jones U.S. Large-Cap Growth Total Stock Market Index. On the other hand, SCHD is a dividend equity ETF that tracks the Dow Jones U.S. Dividend 100 Index. While both funds have a focus on large-cap stocks, their investment strategies and goals are quite different.
Investing in the right ETF can make a significant difference in your long-term investment returns. That’s why it’s essential to understand the differences between SCHG and SCHD before making a decision. I will provide a detailed analysis of the two funds and offer my expert opinion on which one may be a better fit for your investment goals and risk tolerance level.
Understanding SCHG vs SCHD
What is SCHG?
SCHG is an exchange-traded fund launched by Charles Schwab Investment Management. It seeks to track the Dow Jones U.S. Large-Cap Growth Total Stock Market Index.
The fund invests in large-cap companies in the public equity markets of the United States. It has an expense ratio of 0.04%.
The fund evaluates companies operating in diversified sectors and selects growth stocks. SCHG is part of the Schwab Strategic Trust.
With past performance in large-cap growth, the total interactive chart shows that the fund has a dividend yield of 0.44%. The fund uses a full replication technique and future results may vary. As of the current date, the fund has shares outstanding of 3.3 million and an adjusted SCHG yield premium of 0.01%.
It is important to note that past performance does not guarantee future results. Investors should always do their own research and analysis before investing in any security.
What is SCHD?
SCHD is an exchange-traded fund launched by Charles Schwab Investment Management. It seeks to track the Dow Jones U.S. Dividend 100 Index. The fund invests in large-cap companies in the public equity markets of the United States. It has an expense ratio of 0.06%.
The fund evaluates companies based on their dividend track record and selects those securities with consistent dividend payments. SCHD is part of the Schwab Strategic Trust.
With past performance in large-cap growth, data from the total interactive chart shows that the fund has a dividend yield of 2.87%. The fund uses a total return replication technique and future results may vary. As of the current date, the fund has shares outstanding of 13.2 million and an adjusted SCHD yield premium of 0.01%.
Like SCHG, it is important to note that past performance does not guarantee future results. Investors should always do their own research and analysis before investing in any security.
When comparing SCHG vs SCHD, it is important to consider your investment goals and risk tolerance. SCHG focuses on growth stocks while SCHD focuses on consistent dividend payments. Both funds have their own advantages and disadvantages. Investors should carefully evaluate their options before making any investment decisions.
Key Differences Between SCHG vs SCHD
Table of Key Differences SCHG vs SCHD
Before diving into the details, let’s take a look at a side-by-side comparison of SCHG and SCHD:
| SCHG | SCHD | |
|---|---|---|
| Investment Strategy | Seeks large-cap growth stocks | Selects dividend-paying companies with a history of consistent dividend growth |
| Expense Ratio | 0.04% | 0.06% |
| Tax Efficiency | May generate more capital gains due to its focus on growth stocks | May be more tax-efficient due to its focus on dividend-paying stocks |
Investment Strategy sCHG vs SCHG
SCHG and SCHD are both ETFs managed by Charles Schwab Investment Management. However, they have different investment strategies. SCHG seeks to invest in large-cap growth stocks, while SCHD focuses on dividend-paying companies with a history of consistent dividend growth.
This means that if you’re looking for exposure to growth stocks, SCHG may be a better fit for you, while SCHD may be more suitable if you’re looking for income from dividend-paying stocks.
Expense Ratio SCHG vs SCHD
Expense ratios and fees are an important factor to consider when investing in ETFs. SCHG has a lower expense ratio of 0.04% compared to SCHD’s 0.06%. This means that SCHG may be a more cost-effective option for investors.
Tax Efficiency sCHG vs SCHG
Another important factor to consider is tax efficiency. SCHG may generate more capital gains due to its focus on growth stocks, which may result in higher taxes for investors. On the other hand, SCHD may be more tax-efficient due to its focus on dividend-paying stocks, which may result in lower taxes for investors.
It’s important to note that past performance is not indicative of future results. While SCHG has had a higher total return than SCHD in the past, this does not guarantee that it will continue to outperform in the future. Investors should also consider other factors such as the fund’s holdings, benchmark, and sector diversification when evaluating these ETFs.
Overall, both SCHG and SCHD are solid ETFs that can provide investors with exposure to large-cap growth and dividend-paying stocks, respectively. Investors should carefully consider their investment goals and risk tolerance before choosing one over the other.
Which One is Better? SCHG vs SCHD
Factors to Consider SCHG vs SCHD
When choosing between SCHG and SCHD, there are several factors to consider. One of the main differences between the two exchange-traded funds is that SCHG focuses on large-cap growth stocks, while SCHD selects large-cap companies with a record of consistently paying dividends. Another difference is that SCHD has a higher exposure to the financial services sector and a lower standard deviation than SCHG.
When to Choose SCHG
If you are looking for an investment that seeks capital gains by investing in large-cap growth stocks, then SCHG may be the better choice for you. The fund invests in companies that are selected for fundamental strength relative to their peers, based on financial ratios. SCHG is designed to track the performance of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index.
When to Choose SCHD
On the other hand, if you are looking for an investment that seeks to provide a dividend yield and track the performance of the Dow Jones U.S. Dividend 100 Index, then SCHD may be the better choice for you. The fund invests in companies that have a record of consistently paying dividends and selects companies from a diversified range of sectors.
SCHD is designed to provide investors with exposure to large-cap companies in the U.S. public equity markets. When choosing between SCHG and SCHD, it’s important to evaluate past performance, expenses, and holdings.
It’s important to remember that past performance does not guarantee future results. Investors should closely track data and investing analysis to make informed decisions about their investments.
Before you go….
Where to buy and hold sCHG vs SCHG
FAQs sCHG vs SCHG
What is the difference between SCHG and SCHD stock?
SCHG and SCHD are both ETFs offered by Charles Schwab, but they have different investment strategies. SCHG focuses on large-cap growth stocks, while SCHD invests in dividend-paying stocks.
This means that SCHG is generally considered to be riskier than SCHD, but it also has the potential for higher returns.
What ETF is better than SCHD?
Determining which ETF is “better” than SCHD depends on your investment goals and risk tolerance. However, some other popular dividend-focused ETFs include VIG (Vanguard Dividend Appreciation ETF) and SDY (SPDR S&P Dividend ETF).
What is the difference between SCHB and SCHD?
SCHB and SCHD are both ETFs offered by Charles Schwab, but they have different investment strategies. SCHB is a broad-based ETF that seeks to track the performance of the total U.S. stock market, while SCHD invests in dividend-paying stocks.
This means that SCHD may be more appropriate for investors seeking income, while SCHB may be a better choice for those seeking broad exposure to the U.S. stock market.
Is SCHD a good long term investment?
As with any investment, the suitability of SCHD as a long-term investment depends on your individual financial situation and investment goals. However, SCHD is generally considered to be a solid choice for investors seeking income and long-term growth potential, as it invests in high-quality companies with a history of paying dividends.
It’s important to note that past performance is not indicative of future results, and investors should always carefully consider their investment objectives and risk tolerance before making any investment decisions.
