Key Points
The Schwab U.S. Dividend Equity ETF is an elite dividend ETF that has a defensive tilt to it.
The Vanguard Total Stock Market ETF has 36% in tech stocks, which gives it more upside potential.
Both deserve consideration for most portfolios.
- 10 stocks we like better than Schwab U.S. Dividend Equity ETF ›
While they both have strong long-term track records, the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) and the Vanguard Total Stock Market ETF (NYSEMKT: VTI) construct their portfolios very differently.
This Vanguard exchange-traded fund (ETF) essentially invests in the entire investable U.S. equity market. This Schwab ETF targets dividend-paying stocks with healthy balance sheets, long histories of dividend payments, and above-average yields.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
They can both fit into almost any portfolio, but one of them is built to do better over the long term.
Image source: Getty Images.
SCHD vs. VTI: The tech allocation makes the difference
The Schwab U.S. Dividend Equity ETF is considered one of the best dividend ETFs, and for good reason. Its high-quality tilt, dividend sustainability, and high yield make it appropriate for both income seekers and anyone looking for a more conservative complement to their portfolio.
But it is more defensive, which means it doesn't have the upside potential that many growth ETFs or even broad market funds have.
The Vanguard Total Stock Market ETF does currently have that potential. Even though it holds roughly 3,500 stocks, it has about 36% of its portfolio invested in tech. That is going to give it more upside potential over the long term, just as it has over the past two decades.
To reiterate, both are great ETFs. But when it comes to long-term upside, the Vanguard Total Stock Market ETF is more likely to hit the mark.
Should you buy stock in Schwab U.S. Dividend Equity ETF right now?
Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $475,926!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,296,608!*
Now, it’s worth noting Stock Advisor’s total average return is 981% — a market-crushing outperformance compared to 205% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of May 8, 2026.
David Dierking has positions in Vanguard Total Stock Market ETF. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
