I want to streamline to VOO and SCHD for broad exposure and dividends – has anyone done this successfully?

Ever since President Trump announced his policy of reciprocal tariffs on international trade to level the playing field, markets have had difficulties calculating the longer term impacts. Traditional academic economists went into Chicken Little mode, proclaiming how tariffs will embolden America’s enemies, send inflation to the roof, and start a trade war against the US. Others embraced President Trump’s decision, citing decades of unfair trade barriers by other nations and routine dumping on US markets for steel, agriculture, textiles, and other goods that decimated domestic US businesses. 

The resulting market tumult has caused the 10 year bond market to fluctuate intraday by an abnormal 60 basis points and for the Dow Jones Average to swing by thousands of points in the course of a trading day. If normal 300 point swings are considered a roller coaster, then the past few days’ price ranges could be likened to The Cyclone on steroids. 

The Goldilocks Recipe For Portfolios

Investors looking to continue growth but who lack the stomach for the market’s current gyrations are contemplating ETF combinations for their portfolios. Among the different growth oriented ETFs, the Vanguard S&P 500 ETF (NYSE: VOO) is one of the most popular and widely held S&P 500 Index ETFs in the industry.  The Schwab US Dividend Equity ETF (NYSE: SCHD) is an ETF that has exhibited solid dividend yields from its constituent stocks, which contain a predominance of long historied household names and essential goods and services stocks that possess greater protection from market fluctuations and generate hefty dividend income to boot.  Reddit fans have posted their views on combining VOO and SCHD, have offered their opinions,  and suggested variations to realize this strategy. 

Vanguard S&P 500 ETF (NYSE: VOO)

The Vanguard S&P 500 ETF is a favorite of Warren Buffett and many FIRE (Financial Independence, Retire Early) devotees. Its tracking of the S&P 500 index has delivered sizable double digit growth for millions of portfolios over the past several years. Founded by John Bogle, who is considered “the father of index investing”, the Vanguard S&P 500 ETF is one of the most popular and widely held ETFs in the world. 

With an inception date of September 7, 2010, VOO has been going strong for nearly fifteen years. During that time, it has notched an average ROI of 12.46% in 10-years and an average 14.00% ROI since inception, as of April 10, 2025.

Additional details include, at the time of this writing:

• Total Net Assets – $1.32 trillion
• Dividend Yield – 1.36%  (pays quarterly)
• Minimum Investment –  $1.00
• Expense Ratio –  0.03%

Top 5 Sector Weightings:

• Technology – 30,70%
• Financial Services – 14.50%
• Healthcare – 10.80%
• Consumer Discretionary – 10.50%
• Communication Services – 9.40%

The top 10 largest holdings are the high-flying Magnificent 7 tech stocks, along with Berkshire Hathaway and Broadcom.

• Apple – 7.24%
• Nvidia – 6.07%
• Microsoft – 5.85%
• Amazon – 3.93%
• Meta Platforms (Facebook) – 2.88%
• Alphabet Class A (Google) – 1.97%
• Berkshire Hathaway – 1.87%
• Broadcom – 1.84%
• Alphabet Class C (Google) – 1.62%
• Tesla – 1.62%

Schwab US Dividend Equity ETF (NYSE: SCHD)

The Schwab US Dividend Equity ETF is an exchange traded fund that is designed to track The Dow Jones U.S. Dividend 100 Index. Launched in October, 2011, SCHD has notched an average ROI of 11.44% in 10-years and an average 12.94% ROI since inception, as of April 10, 2025.

Additional details include, at the time of this writing:

• Total Net Assets – $64.37 billion
• Dividend Yield – 3.94%  (pays quarterly)
• Minimum Investment –  $1.00
• Expense Ratio –  0.06%

Sector wise, SCHD’s top 5 heaviest weighted industrial areas are:

1. Energy – 21.12%
2. Consumer Defensive – 19.04%
3. Health Care – 15.65%
4. Industrials – 10.53%
5. Technology – 9.76%

The top 5 weighted holdings in SCHD are:

1. Coca-Cola – 4.47%
2. Verizon Communications – 4.43%
3. Lockheed Martin – 4.29%
4. Altria Group – 4.19%%
5. ConocoPhillips – 4.15%

Variations On A Theme

Given that Reddit investment posters are populated heavily with DIY and FIRE minded folks, customizing portfolios is akin to a competitive sport in their circles. A fair number of respondents were deploying a 50/50 split between VOO and SCHD or varying ratios of 60/40 or even 80/20 – all leaning in favor of VOO’s growth, but all appreciative of the diversification and lower volatility afforded from SCHD. 

Some variations on the strategy included the following:

• Several respondents were swapping SCHD for Schwab US Large-Cap Growth (NYSE: SCHG). SCHG contains a number of the same stocks as SCHD in as far as stability goes, but its 0.45% yield makes it a less attractive acquisition if one wishes to get dividend income to offset lower growth.
• Another respondent suggested the relative stability and high income of several REITs or a REIT ETF in place of SCHD, which admittedly shares a percentage of crossover with VOO.
• One respondent noted that having both VOO and SCHD keeps the holdings entirely in US stocks and suggested perhaps a split of VOO – 50%, SCHD – 25%, and then an international ETF or a small cap growth ETF that includes foreign stocks for the remaining 25%.
• A more adventurous respondent said the poster should “live a little” and at least add a 10% allocation to the YieldMax Universe Fund of Option Income Fund of ETFs (NYSE: YMAX). By investing in other ETFs and actively trading in them, YMAX currently yields over 63%, but is arguably even more risky than an entire VOO portfolio.

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