VOO vs SCHX: Large-Cap ETF Battle
VOO holds the S&P 500; SCHX reaches a bit deeper into large caps with the Dow Jones US Large-Cap 750. Same near-zero fee, slightly different breadth — the practical difference is small.
Don't have time? Here's what you need to know:
- 1VOO tracks the 500-stock S&P 500; SCHX tracks the broader ~750-stock Dow Jones US Large-Cap index.
- 2Both cost about 0.03% and are dominated by the same mega-caps, so returns track within a hair.
- 3SCHX is marginally broader and more rules-based; VOO is the standard, committee-selected S&P 500.
- 4Choose by brokerage and fund family — and don't hold both, since their overlap makes it redundant.
Two Slightly Different Large-Cap Indexes
VOO (Vanguard S&P 500) and SCHX (Schwab US Large-Cap) both deliver U.S. large-cap exposure at a rock-bottom cost, but they follow slightly different indexes. VOO tracks the S&P 500 — about 500 of the largest U.S. companies, selected by an S&P committee that requires profitability and other criteria. SCHX tracks the Dow Jones U.S. Large-Cap Total Stock Market Index, which captures roughly the largest 750 U.S. stocks by a rules-based market-cap cutoff.
The practical upshot is that SCHX holds a bit more of the large-cap market — reaching down into companies just below the S&P 500 threshold — while VOO sticks to the committee-curated 500. Both are cap-weighted, so their largest holdings are the same familiar mega-caps in nearly the same proportions. The extra names in SCHX sit at the small end of large-cap and carry little weight, which is why the two funds behave almost identically.
Cost, Overlap and Why They Track Closely
On cost they're essentially tied — both around 0.03% — so the fee won't decide this one. Because both indexes are dominated by the same mega-cap leaders at the top, their overlap is enormous and their returns track within a hair of each other year to year. The marginal extra holdings in SCHX add a touch more breadth but almost no return difference.
VOO does carry one subtle distinction: the S&P 500's committee applies a profitability screen and can be slower to add or drop companies, while SCHX's rules-based index simply takes the largest ~750 by size. In theory this gives SCHX marginally broader and more mechanical coverage, but in practice the effect on performance has been negligible. This is a choice between two excellent, near-equivalent core funds.
| VOO | SCHX | |
|---|---|---|
| Issuer | Vanguard | Schwab |
| Index | S&P 500 | Dow Jones US Large-Cap (~750) |
| Holdings | ~500 | ~750 |
| Expense ratio | ~0.03% | ~0.03% |
| Selection | Committee + profitability screen | Rules-based (largest ~750) |
| Weighting | Market-cap | Market-cap |
| Behavior | Standard S&P 500 proxy | Nearly identical, slightly broader |
Tip: If you already bank or invest at Schwab and want commission-free trading and easy automation, SCHX is the natural pick. If you're in the Vanguard ecosystem, VOO fits just as well.
Performance and How to Use Them
Both funds are exceptional, low-cost core holdings that capture the bulk of the U.S. stock market's value and have delivered the broad market's long-run returns — historically the S&P 500 has compounded at roughly 10% nominal per year over very long periods, with plenty of volatility along the way. SCHX's slightly wider net means it edges marginally closer to a total-large-cap fund, but the difference versus VOO is within noise.
Either makes a fine foundation for a portfolio. Pair one with an international fund and a bond fund and you have a simple, diversified core. The decision really comes down to which brokerage and fund family you prefer, your access to commission-free trading, and whether you want the exact S&P 500 (VOO) or a slightly broader large-cap index (SCHX).
Important: Don't hold both VOO and SCHX expecting diversification. Their overlap is so high that owning both just complicates your portfolio without meaningfully spreading risk.
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Which Should You Choose
If you specifically want the S&P 500 — the most widely tracked U.S. benchmark, the one your 401(k) and most index funds reference — choose VOO. It's the default that pairs cleanly with the rest of the Vanguard lineup and is the standard yardstick for U.S. large-cap performance.
If you invest at Schwab, value the marginally broader large-cap coverage, or simply prefer Schwab's fund family and commission-free ecosystem, SCHX is an equally strong choice. For a taxable account where you already hold one with gains, there's no reason to switch — the funds are too similar to justify a tax bill. Pick one as your large-cap core and direct new contributions there.
Frequently Asked Questions
Is VOO or SCHX better?
They're nearly equivalent. VOO tracks the S&P 500 (about 500 stocks) and SCHX tracks the Dow Jones US Large-Cap index (about 750 stocks), both for around 0.03%. SCHX is marginally broader, but their returns track within a hair of each other. Choose based on your brokerage and fund-family preference rather than expecting a meaningful performance gap.
What's the difference between VOO and SCHX?
Mainly breadth and index method. VOO follows the committee-selected S&P 500 with its profitability screen, while SCHX follows a rules-based index of roughly the largest 750 U.S. companies. SCHX therefore reaches a bit deeper into large caps, but since both are cap-weighted and dominated by the same mega-caps, the practical difference is small.
Does SCHX's extra breadth give better diversification?
Only marginally. SCHX holds about 250 more names than VOO, but those extra companies sit at the bottom of the large-cap range and carry very little weight in a cap-weighted fund. The added diversification is real but tiny, and it has had a negligible effect on returns versus the S&P 500.
Should I switch from VOO to SCHX or vice versa?
Usually not. The two funds are so similar that switching rarely justifies the effort, and in a taxable account selling an appreciated position would trigger capital-gains tax that dwarfs any benefit. Pick one as your large-cap core, ideally matching your brokerage for free trading and easy automation, and direct new money there.
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Alex Harrington
CFA Level II Candidate, Finance & Economics
Alex Harrington is an independent ETF researcher and personal finance writer with over 8 years of experience analyzing exchange-traded funds. A CFA Level II candidate with a background in economics, Alex has reviewed 800+ ETFs and helped thousands of beginners build their first investment portfolios through clear, jargon-free education.
This content is for educational purposes only and does not constitute financial advice. Past performance does not guarantee future results. Consult a licensed financial advisor before making investment decisions.