Why Buy the Vanguard Value ETF When You Can Buy This Instead?

"VTV tracks the CRSP US Large Cap Value Index, a wide net cast across hundreds of large-cap U.S. stocks that screen as cheap on price-to-book, forward earnings, and a few other ratios. The fund charges 3 basis points, which is about as close to free as a fund gets. You get diversification, low cost, and a yield that reflects the index average."

"SCHD does something narrower. It tracks the Dow Jones U.S. Dividend 100, which starts with companies that have paid dividends for at least a decade, then ranks them on cash flow to debt, return on equity, dividend yield, and dividend growth. The result is a 100-stock portfolio that costs 6 basis points and concentrates in businesses that print cash and send a chunk back to shareholders. The top ten holdings, including Bristol-Myers Squibb, Merck, ConocoPhillips, and Lockheed Martin each near 4%, account for roughly 41% of the fund."

"SCHD kept up with VTV on total return over the long haul, which makes the case for choosing SCHD over VTV come down to what each fund actually puts in your pocket. What each fund is actually buying matters because VTV’s roughly 1.9% trailing yield contrasts with SCHD’s roughly 4.1% trailing yield, even though both target unloved, cash-generative businesses."

"From October 2011 through May 2026, SCHD returned roughly 499% versus VTV's 490%, an exponential trend of about 12% annually for SCHD against 11% for VTV. Close, but the dividend-screened portfolio compounded faster despite holding a fraction of the stocks."

VTV provides about a 1.9% trailing yield while tracking the CRSP US Large Cap Value Index, which holds hundreds of large-cap stocks screened as inexpensive on valuation metrics. VTV charges 3 basis points and offers broad diversification with income reflecting the index average. SCHD provides about a 4.1% trailing yield while tracking the Dow Jones U.S. Dividend 100, which selects companies with at least a decade of dividend payments and ranks them using cash flow, leverage, return on equity, dividend yield, and dividend growth. SCHD holds 100 stocks, charges 6 basis points, and concentrates heavily in top holdings, which together represent about 41% of assets. Over October 2011 to May 2026, SCHD slightly outperformed VTV on total return and compounded faster annually.

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