SCHD
Schwab U.S. Dividend Equity ETF
SCHD tracks the Dow Jones U.S. Dividend 100 /, focusing on high dividend yield with rigorous quality screens. Requires 10+ years of dividend payments and screens for financial health metrics. 100% US exposure to quality large-cap companies.
RSP
Invesco S&P 500 Equal Weight ETF
RSP tracks the S&P 500 Equal Weight /, providing equal-weighted exposure to all S&P 500 companies. Each stock gets approximately 0.2% weight, reducing mega-cap concentration and increasing mid-cap exposure compared to market-cap weighted S&P 500 ETFs.
Key Metrics Comparison
| Metric | SCHD | RSP | Winner |
|---|---|---|---|
| Dividend Yield | 3.27% | 1.58% | SCHD (+1.88%) |
| Expense Ratio | 0.06% | 0.20% | SCHD (-0.14%) |
| 5-Year Annual Return | 11.2% | 12.8% | RSP (+1.6%) |
| Number of Holdings | 104 | 503 | RSP |
| Assets Under Management | $95.2B | $32.5B | SCHD |
| P/E Ratio | 15.2 | 18.8 | SCHD |
| Weighting Method | Quality Screens | Equal Weight | Different Strategies |
| Volatility (5-Year) | 15.2% | 17.5% | SCHD |
Performance Comparison
SCHD Performance
Strong total returns with significantly higher income. Quality screens provide defensive characteristics during market downturns. Lower volatility than equal weight strategies.
RSP Performance
Slightly higher total returns with lower income. Equal weight provides better diversification and reduced mega-cap concentration. Higher volatility but potential for mean reversion benefits.
Strategy Analysis
SCHD Approach
Quality-focused dividend growth investing:
- Minimum 10 years of dividend payments
- Dividend yield > 2.5% requirement
- Cash flow to total debt > 50%
- Return on equity > 15%
- Market cap > $500 million
- Focus on financial health and stability
- Value-oriented, defensive sectors
- Concentrated in 104 quality companies
RSP Approach
Equal weight S&P 500 /ing:
- Equal weight for all 503 S&P 500 stocks
- Each stock gets ~0.2% allocation
- Reduces mega-cap concentration risk
- Increases mid-cap exposure
- Quarterly rebalancing for equal weights
- Captures mean reversion benefits
- Higher turnover than market-cap ETFs
- Better sector diversification
Quality Selection vs Equal Weight Diversification
SCHD offers quality selection (104 holdings, quality screens, 3.27% yield) with value tilt, while RSP provides equal weight diversification (503 holdings, 0.2% each, 1.58% yield). This represents the choice between focused quality income and broad equal weight diversification.
SCHD Advantages
Quality screens: Financial health filters
Higher income: 3.27% yield vs 1.58%
Lower cost: 0.06% vs 0.20% expense ratio
Lower volatility: 15.2% vs 17.5%
RSP Advantages
Better returns: 12.8% vs 11.2% (5-year)
Reduced concentration: No mega-cap risk
Mean reversion capture: Quarterly rebalancing
Broad diversification: 503 holdings vs 104
Weighting Strategy Comparison
Top Holdings Weight Comparison
SCHD uses fundamental quality screens while RSP uses equal weighting - resulting in dramatically different top holdings allocations.
SCHD Top 10 Holdings
RSP Top 10 Holdings
VOO Top 10 Holdings
SCHD Avg. Holding
Market Capitalization Exposure
Market Cap Distribution Comparison
SCHD is primarily large-cap with quality screens, while RSP has significant mid-cap exposure due to equal weighting reducing mega-cap dominance.
SCHD Large-Cap
SCHD Mid-Cap
RSP Large-Cap
RSP Mid-Cap
Income Analysis
SCHD Income Profile
High dividend income from US quality companies with strong dividend growth history. Focus on sustainable dividends from financially healthy US corporations with yield > 2.5%.
RSP Income Profile
Lower yield from equal weight S&P 500 exposure. Many S&P 500 companies are growth-oriented with lower dividends. Equal weighting includes all companies regardless of dividend policy.
Sector Allocation
SCHD Sectors (Quality Focus)
RSP Sectors (Equal Weight)
Top 5 Holdings Comparison
SCHD Top Holdings (Quality Weighted)
RSP Top Holdings (Equal Weight ~0.2% each)
All 503 holdings have approximately 0.20% weight each
Investment Recommendation
🎯 Choose SCHD If:
- Higher current income is critical (3.27% vs 1.58%)
- You prefer quality screens and financial health filters
- Lower costs matter (0.06% vs 0.20%)
- Dividend growth is a priority (8.5% vs 6.2%)
- You want lower volatility (15.2% vs 17.5%)
- Quality-focused investing appeals to you
- You're in or near retirement and need income
- You believe in focused, quality stock selection
⚖️ Choose RSP If:
- Reducing mega-cap concentration is your priority
- You want equal weight diversification across S&P 500
- Higher total returns matter (12.8% vs 11.2%)
- Mid-cap exposure appeals to you (35% vs 8%)
- You want to capture mean reversion benefits
- Broad diversification is more important than income
- You're concerned about tech/mega-cap concentration
- You believe in equal weight strategy outperformance
💡 Portfolio Construction Strategy
Many investors use RSP as their core S&P 500 holding (40-50% of US allocation) and add SCHD as an income satellite (20-30%) to boost yield and add quality tilt. This combines RSP's equal weight diversification with SCHD's income and quality characteristics. Alternatively, consider 60% RSP + 40% SCHD for balanced exposure. Note that RSP's higher expense ratio (0.20%) and turnover may have tax implications in taxable accounts.