Is the Schwab U.S. Dividend Equity ETF a Buy Now?

Published: Saturday, July 19, 2025 at 3:13 pm

Schwab U.S. Dividend Equity ETF: A Look at the Popular Fund

The Schwab U.S. Dividend Equity ETF (SCHD) is a widely held index fund that tracks the Dow Jones U.S. Dividend 100 index. This fund focuses on companies with high-quality dividend policies, primarily in sectors like energy, consumer staples, and healthcare. With $70.1 billion in assets under management, it's one of the largest ETFs available.

The fund has experienced significant capital inflows over the past year, outpacing other dividend-focused ETFs. However, it's important to consider its performance relative to the broader market. Over the last decade, SCHD has underperformed the S&P 500 in terms of price gains, with an average annual increase of 7.6% compared to the S&P 500's 11.5%.

The picture changes when considering dividend payouts. SCHD boasts a higher average dividend yield of 3.1% over the last decade, surpassing the S&P 500's 1.7%. This results in a robust total return of 11.1% per year, assuming dividends are reinvested.

Currently, SCHD is trading below its annual highs, offering an above-average dividend yield of 4%. The fund's holdings include established companies like Coca-Cola, The Home Depot, and Chevron. It also has a low annual expense ratio of 0.06%.

BNN's Perspective:

The Schwab U.S. Dividend Equity ETF appears to be a solid option for income-focused investors. While it may not outperform the broader market in terms of price appreciation, its higher dividend yield and focus on established companies provide a compelling investment opportunity, especially during periods of market volatility. Investors should consider their individual financial goals and risk tolerance before investing.

Keywords: Schwab U.S. Dividend Equity ETF, SCHD, dividend ETF, Dow Jones U.S. Dividend 100 index, dividend yield, investment, ETF, income, stocks, finance, market, returns, portfolio, value investments

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