In the five years to September 2026, SCHD returned 9.5% a year and VIG returned 10.7%, dividends reinvested. Both screen for companies with a long dividend record, but in opposite directions: SCHD leans towards higher yield, while VIG removes the highest yielders. That one difference decides most of the result, and only in a taxable account.
For a representative saver about twenty years from retirement, investing in a taxable account: On known costs alone, VIG leads by 2.8 points in the plan's success rate. That edge comes from fees and the tax on dividends, so it does not depend on which fund had the better five years. If the last five years repeat, the lead widens to 19.5 points.
With only the known costs — the same market for both funds, differing by fees and dividend tax — the money lasted in 78.7% of 10,000 simulated futures with SCHD and 81.5% with VIG. Using each fund's own returns from October 2021 to September 2026 instead, the figures were 69.5% and 89.0%. Both funds were run against the identical sequence of market shocks.
Yield, and where it is taxed. In a taxable account dividends are taxed in the year they are paid, whether or not you spend them. The higher-yielding fund therefore gives up more every year even when total returns match. In an IRA or 401(k) that difference disappears — switch the account question above and watch it go.
SCHD tracks the Dow Jones U.S. Dividend 100 Index — it screens for ten years of dividend payments, then ranks on cash flow to debt, return on equity, yield and dividend growth. VIG tracks the S&P U.S. Dividend Growers Index — it holds companies with ten straight years of dividend increases, excluding the highest-yielding quartile.
SCHD charges 0.06% a year and yields 3.00%; VIG charges 0.04% and yields 1.48%.
Returns and volatility are measured from monthly returns with dividends reinvested over 60 months — one sample from one market, and weak evidence for telling two broad funds apart, which is why the known-cost result is reported first. Dividends are taxed at 15% in a taxable account by default, the qualified rate most households pay; the page also shows the 0% and 20% brackets. It is the only tax modeled. A 3.8% net investment income tax can also apply to dividends once modified adjusted gross income passes $200,000 ($250,000 joint); it is not included. Retirement spending is held at 70% of income in today's dollars, and contributions exclude any employer match.
Neither in general. The difference you can count on is tax: SCHD’s higher dividend costs more each year in a taxable account and nothing in an IRA. Anything beyond that depends on which fund’s recent record you expect to continue.
Yes — it is the largest known difference between them. SCHD pays a considerably higher dividend than VIG, and in a taxable account that income is taxed every year whether you spend it or not.