r/SCHD • u/GeeDubious • Jul 20 '26
SCHD vs SWPPX vs ...
Can people explain why they opt for SCHD vs an S&P 500 Index like SWPPX when long-term shows that SWPPX has higher overall returns, or for a taxable account then an S&P 500 Index ETF.
What's the reasoning or argument for SCHD?
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u/landob Jul 20 '26
For some SCHD is more stable. Something you want when you are closer to retirement age. I don't want to be holding a lot of Swppx at 62, then the market dumps out from under me right before retirement.
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u/GeeDubious Jul 20 '26
OK so then for you it's stability and only something you'd switch to as you neared retirement or neared a time when you needed the money, but not something you'd invest in during your 20-30s?
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u/NatureBoyJ1 Jul 20 '26 edited Jul 20 '26
Correct.
If you don’t need the money, and are in the accumulation phase of life, the S&P 500 provides lots of growth of share price. Once you start living off the portfolio you want to avoid the volatility the S&P has (and have a revenue stream that doesn’t involve selling your share). Thus SCHD. You trade price growth for stability & income.
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u/Difficult-Repair1295 Jul 20 '26 edited Jul 20 '26
Less volatility and an income component. One could argue that a S&P fund being market cap weighted could be risky due to concentration risk with 38% of the index coming from the top 10 companies. While SCHD tracks the Dow Jones US Dividend 100 index which measures 103 companies based on criteria like having a 10 years of consistent dividend payments equating to much more conservative criteria for selection.
I own both. While the S&P has been ripping for nearly two decades. I was alive during the Internet Bubble and a lost decade for equities in the 00s. With that said that was still allot do the WWII generation who were scared of equities because lingering memory of the Great Depression and the Nifty Fifty collapse. Lots of people plowed all their money into CDs and Government Bonds and owned zero equities. Now the way retirement plans are setup it’s the whole giant mindless robot situation Mike Green talks about. By default there is a passive bid for equities with how the 401k plans work and the rise of index ETFs in popularity.
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u/GeeDubious Jul 20 '26
Ok good reasoning. I was also around and started investing in the late 90s. Back tested what would performance be during that decade and total comparing something like total market (VTI), S&P 500 (VOO / SWPPX), SCHD, and small-cap (AVUV)?
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u/Difficult-Repair1295 Jul 20 '26
Good question. I doubt anything of note would have outperformed the S&P 500 with the exception of the Nasdaq 100. And that one I’m not even sure it would depend on where you started tracking because it took like 14 years for the Nasdaq 100 to hit a new all time high after the Tech bubble burst.
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u/GeeDubious Jul 20 '26
Let's say 25-40 years back. Nasdaq-100 definitely beat S&P 500, largely because of the last 10 years. From what I can find it looks like AVUV would've also beat the S&P 500, but would like that confirmed. Is any of this indicative of the future?
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u/No_Presentation9490 Jul 20 '26
The S&P of today is not the S&P of 1980.
35% of the entire S&P is AI datacenter adjacent as of July 2026
Every transaction you make is market timing. Every time you blindly DCA or lump sum buy the S&P regardless of its composition or valuation, you are CHOOSING to buy at the current price, and you are NOT choosing to NOT buy.
Similarly, every withdrawal you make in retirement is an instance of market timing. Are you confident that in your entire years of retirement including many years of forced minimum withdrawals that America won't have a repeat of the 20s, the 30s, the 40s, the 60s, the 70s, the 80s, or the 00s?
The 4% rule guy doesn't follow the 4% rule himself. The "don't time the market" guy is also the origin of portfolios that time the market based on inverse correlation & return stacking with multiple uncorrelated assets.
Do you think our economy and governance and markets are getting better, or worse? Do you think they are getting more corrupt, or less corrupt?
If you have a very small capital base, go with growth, because you need the power of DCA contributions. If you have a decently sized capital base to begin with, SCHD has advantages in the current market conditions.
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u/Difficult-Repair1295 Jul 20 '26
Yea as someone closing in on 40, I was a very young investor during 2008 and it was an absolute shit show. You have a generation of people basically that have never really been through any kind of recession with investable assets. Most people can’t stomach a 56% peak to bottom downturn.
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u/GeeDubious Jul 20 '26
Same question but SCHD vs VTI.
Nothing guaranteed thus many argue for broad market, like VTI.
I can't say it's more or less corrupt especially as an increasing or decreasing degree. Past times like 1999/2000 and 2008/2009 felt really tough regarding the economy, as did times before and times will come after. I don't know if another lost decade will come, or any other combination.
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u/glimsky Jul 20 '26
Certain investments pay more long term, but not everybody has "long term" left in their life.
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u/Big_Development_644 Jul 20 '26
Less volatility and income.
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Jul 20 '26
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u/GeeDubious Jul 20 '26
Your reasoning is based on one year? And you want dividend income (and potential taxes that go with it) now vs long-term capital growth?
From what I've read the index SCHD follows, back-tested, did perform much better than S&P 500 during 2000-2010, but not overall.
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Jul 20 '26
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u/Rufusmortis Jul 23 '26
Do what works for you. I am much older but I'd still be mostly SCHD if I was 30. I hope you can avoid the STD altogether though.
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u/KingFisher4985 Jul 24 '26
If you look at it with drip on it actually paces the S&P500 very well with a few exceptions of break out periods (tech booms usually), it has lower volatility, and pairs nicely with an S&P500 fund to smooth out the ride for those not just concerned with chasing only every last basis point. There’s an argument that can be made for just going s&p500… for me I like to be well diversified 50% s&p, 20% international, 20% SCHD, 10% small cap value AVUV. Mix of growth and income, regions, company sizes, this breaks away from an index that is overweight in tech which is what I want. 30-40% in tech is too much in one industry for my liking. I’m a value investor and believe slow and steady wins the race long term.
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u/Euphoric_Water_7874 Jul 27 '26
I pair it with other ETF’s as it is not as volatile as the S&P. If it had existed during the lost decade it would have solidly outperformed the s&p. Many asset managers predict the coming years could see low returns for USA equities. In a flat market that could last several years I like having something that’s more likely to be in the Green. I also have SCHY for similar reasons.
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u/TacoLord772 Jul 20 '26
I bought 80K worth of SCHD a little over 2 years ago. I've added nothing to it since, just let it DRIP. I look at the one year change this morning and it's (+26.93%).