How to Track Your Dividends: VIG vs SCHD Performance Analysis Through 2025

Performance Tells the Story First

When comparing Vanguard Dividend Appreciation ETF (VIG) and Schwab U.S. Dividend Equity ETF (SCHD), the numbers reveal two fundamentally different investment philosophies. VIG delivered an 8.8% return over the trailing 12 months as of mid-December 2025, while SCHD returned a negative 1.4% during the same period. Over a five-year horizon, the gap widens considerably: VIG grew a $1,000 investment to $1,565, compared to SCHD’s $1,285 growth.

This performance divergence becomes clearer when examining volatility. VIG experienced a maximum drawdown of 20.39% over five years, while SCHD’s peak-to-trough decline reached 16.86%. So while SCHD demonstrated more stability during downturns, VIG’s superior long-term returns suggest its growth-oriented holdings more than compensate for that added volatility.

Understanding the Income Trade-off

Here’s where dividend investors must make their choice: SCHD generates a 3.8% dividend yield, more than double VIG’s 1.6% yield. On a $10,000 investment, that translates to roughly $380 annually from SCHD versus $160 from VIG. For those specifically seeking to track your dividends as a primary income stream, SCHD’s higher payout is the obvious choice.

Yet this higher yield comes at a cost. SCHD concentrates its portfolio on 100 U.S. dividend-paying stocks, emphasizing sectors like energy (20%), consumer defensive (18%), and healthcare (16%). Top holdings include Merck & Co (NYSE:MRK), Cisco Systems (NASDAQ:CSCO), and Amgen (NASDAQ:AMGN)—all solid dividend payers but mature companies with modest growth prospects.

Sector Composition Shapes Your Returns

VIG takes a broader approach, holding 341 stocks weighted toward technology (28%), financial services (22%), and healthcare (15%). Its largest positions—Broadcom (NASDAQ:AVGO), Microsoft (NASDAQ:MSFT), and Apple (NASDAQ:AAPL)—reflect companies that combine dividend growth with significant share buyback programs. These firms deliver value through both income and capital appreciation.

This structural difference explains much of their performance gap. Technology and financial services sectors have outperformed traditional dividend stalwarts in recent years, benefiting VIG investors who accept lower current yields for stronger total returns.

The Cost Consideration

Both ETFs rank among the industry’s most economical options. VIG charges an expense ratio of 0.05%, while SCHD’s ratio stands at 0.06%—a negligible 0.01 percentage point difference that shouldn’t factor heavily into your decision. VIG manages $101.8 billion in assets under management (AUM) compared to SCHD’s $71.4 billion, both suggesting well-established, liquid funds.

Beta measures reinforce their risk profiles: VIG’s beta of 0.85 indicates slightly lower volatility than the S&P 500, while SCHD’s 0.77 beta shows even greater stability.

Making Your Decision: How to Track Your Dividends Effectively

Choosing between these ETFs depends on your specific goals. Income-focused investors who prioritize immediate dividend payments and can tolerate modest growth should lean toward SCHD. Its straightforward approach to track your dividends makes it suitable for retirees or those building a supplemental income stream.

Conversely, investors seeking balanced returns—combining growth potential with steady dividend appreciation—should consider VIG. Companies like Microsoft and Apple provide increasing (though measured) dividend payments alongside aggressive stock buyback programs, generating shareholder returns through multiple channels.

Over five years, VIG’s total return of 70.6% significantly outpaced SCHD’s 54%, though SCHD’s smoother ride with lower drawdowns appeals to risk-averse investors. Both remain legitimate choices; the right selection hinges on whether you prioritize current income or long-term wealth accumulation when you track your dividends and monitor portfolio growth.

Key Metrics Comparison