These 3 Schwab ETFs Are Quietly Beating the S&P 500 (And Nobody Is Talking About It)
Let’s be honest for a second.
If you ask 10 investors what ETF to buy, 9 of them will say the same thing: VOO.
Why? Because it’s “safe.” Because everyone else is buying it. Because their advisor told them to.
But here’s the uncomfortable truth most people don’t want to hear:
👉 Safe doesn’t always mean smart.
👉 And popular doesn’t always mean profitable.
While the crowd blindly piles into VOO, a quieter group of investors has been using Charles Schwab ETFs to outperform the S&P 500, build wealth faster, and even retire earlier.
Today, we’re breaking down 3 Schwab ETFs that are doing exactly that — growth, income, and total market exposure, all with ultra-low fees.
No fluff.
No hype.
Just tickers, numbers, and strategy.
Let’s start with the one that’s turning long-term investors into millionaires.
1️⃣ SCHG — The Growth Engine That Leaves VOO Behind 🚀
If you’re under 45 and still playing it “too safe,” this part might hurt.
Ask yourself this:
Why settle for ~14% returns when you could be getting ~19%?
Meet SCHG (Schwab U.S. Large-Cap Growth ETF).
This ETF has one simple mission:
Own the fastest-growing companies in America and let them run.
We’re talking about:
Microsoft
Apple
Nvidia
Amazon
Alphabet
Yes, the same mega-cap tech giants everyone loves — but packaged with Schwab’s ultra-low fees.
💸 Expense ratio: Just 0.04%
That’s basically the same as VOO’s 0.03%. On $10,000, the difference is $1 per year.
Now here’s where things get serious.
📈 Performance That Changes Everything
SCHG (5-year annual return): ~19.2%
VOO (5-year annual return): ~14.7%
Let’s put real money on this.
$10,000 in VOO (10 years ago) → ~$40,000
$10,000 in SCHG (10 years ago) → ~$59,000
That’s $19,000 extra…
for doing absolutely nothing different — except choosing a better ETF.
Using the Rule of 72, at ~19% returns, your money doubles every 3.7 years.
Yes, SCHG’s dividend yield is tiny (~0.39%).
But when you’re young, you don’t want dividends.
You want capital growth.
As Warren Buffett famously said:
“The stock market is a device for transferring money from the impatient to the patient.”
2️⃣ SCHD — The Dividend Machine Built for Real Retirement Income 💰
Now let’s talk about the phase nobody plans properly for: income.
Here’s the problem with VOO no one likes to mention:
Dividend yield: ~1.1%
Invest $100,000…
You get about $1,100 a year.
That won’t even cover groceries, let alone retirement.
Chasing 8–10% “high yield” ETFs is dangerous — those funds are often packed with dying companies.
Enter SCHD (Schwab U.S. Dividend Equity ETF).
This ETF doesn’t mess around.
To qualify, companies must have:
✅ Paid dividends for at least 10 consecutive years
No shortcuts. No hype stocks.
You’re owning proven cash machines like:
Coca-Cola
Verizon
Lockheed Martin
ConocoPhillips
💵 Why SCHD Is a Beast
Dividend yield: ~3.7% – 4.1%
3–4× higher income than VOO
Qualified dividends → lower tax rates (15–20%)
$10,000 invested = $367–$412 per year in real cash, paid quarterly.
Over 10 years:
Portfolio grows to ~$32,500
While paying you income the entire time
This is why many retirees call SCHD their “retirement paycheck ETF.”
As Charlie Munger said:
“The big money is not in the buying and selling, but in the waiting.”
3️⃣ SCHB — The ETF That Quietly Beats VOO With Less Risk 📊
VOO only owns 500 companies.
That means you’re missing:
Mid-caps
Small-caps
The next Apple or Amazon before they explode
That’s where SCHB (Schwab U.S. Broad Market ETF) comes in.
This ETF owns 2,500 U.S. stocks — the entire American economy in one ticker.
And the best part?
💸 Expense ratio: 0.03%
Exactly the same as VOO.
📈 Performance Check
SCHB (10-year annual return): ~15.07%
VOO (10-year annual return): ~14.78%
$10,000 invested 10 years ago:
SCHB → ~$40,450
VOO → ~$39,300
More diversification.
Less concentration risk.
Better long-term balance.
As Peter Lynch said:
“Know what you own, and know why you own it.”
With SCHB, you own America.
🔥 The Smart Way to Combine These 3 ETFs
Your strategy should change with age:
Ages 20–35
70% SCHG (growth)
20% SCHB (diversification)
10% SCHD (small income)
Ages 35–50
50% SCHG
30% SCHB
20% SCHD
Ages 50–60
30% SCHG
30% SCHB
40% SCHD
Ages 60+
60% SCHD (income first)
20% SCHB
20% SCHG (inflation protection)
Final Truth 💡
VOO isn’t bad.
It’s just not the best.
And in investing, “good enough” is the enemy of wealthy.
The difference between 14% and 19% returns over 30 years
is the difference between:
Retiring at 65
Or retiring at 55
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Stop settling.
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