Why I Like SCHD: A Dividend Growth ETF for Long-Term Investors
Why I Like SCHD: A Dividend Growth ETF for Long-Term Investors
Table of Contents
- What Is SCHD ETF?
- Key Features of SCHD
- Sector and Holdings Breakdown
- SCHD Performance Overview
- How Does SCHD Compare to Other Dividend ETFs?
- Is SCHD a Good Investment for You?
- Why I Personally Like SCHD
- FAQs About SCHD
- Conclusion
What Is SCHD ETF?
SCHD, officially known as the Schwab U.S. Dividend Equity ETF, is one of the most popular dividend-focused ETFs available today. Managed by Charles Schwab, it was launched in October 2011 and has since gained massive popularity among long-term and income-focused investors.
It tracks the Dow Jones U.S. Dividend 100 Index, which includes high-quality U.S. companies with a consistent record of dividend payments and strong fundamentals.
- Ticker: SCHD
- Launch Date: October 20, 2011
- Expense Ratio: 0.06%
- Issuer: Charles Schwab
- Assets Under Management (AUM): Over $55 Billion
Key Features of SCHD
✅ Dividend Focused
- Dividend Yield (as of May 2025): ~3.5%
- Dividend Frequency: Quarterly
- Dividend Growth: Consistent year-over-year increases
✅ Cost Efficient
- Expense Ratio: 0.06%
- Great choice for long-term investors
Sector and Holdings Breakdown
SCHD is well-diversified but leans toward value sectors:
| Sector | Approximate Allocation |
|---|---|
| Information Technology | 20% |
| Financials | 18% |
| Health Care | 13% |
| Consumer Staples | 11% |
| Industrials | 10% |
Top 10 Holdings (as of May 2025):
| Company | Weight |
|---|---|
| Broadcom | 4.8% |
| Texas Instruments | 4.5% |
| Home Depot | 4.2% |
| PepsiCo | 4.1% |
| Coca-Cola | 4.0% |
| Verizon | 3.9% |
| Pfizer | 3.8% |
| Cisco | 3.7% |
| IBM | 3.5% |
| Lockheed Martin | 3.4% |
SCHD Performance Overview
Past performance does not guarantee future results.
How Does SCHD Compare to Other Dividend ETFs?
| ETF | Yield | Expense Ratio | Dividend Growth | Strategy |
|---|---|---|---|---|
| SCHD | ~3.5% | 0.06% | High | Dividend Growth |
| VYM | ~3.2% | 0.06% | Medium | High Yield |
| DGRO | ~2.8% | 0.08% | High | Dividend Growth |
🔍 SCHD stands out for balancing dividend yield and capital growth, offering investors the best of both worlds.
Is SCHD a Good Investment for You?
SCHD is well-suited for:
- Income seekers: steady quarterly payouts
- Long-term investors: solid total return
- Low-maintenance portfolios: minimal monitoring needed
⚠️ Not ideal for:
- Day traders
- Investors looking for high-tech growth exposure
Why I Personally Like SCHD
When I started looking into dividend ETFs, I wanted something simple but powerful. SCHD stood out to me because:
- I didn’t need to monitor it every day.
- It gave me regular cash flow through dividends.
- It included big, trusted companies I already knew.
Over time, I’ve come to appreciate its stability and how it fits into a long-term, passive investing approach.
FAQs About SCHD
- Does SCHD pay monthly dividends? No, it pays quarterly—March, June, September, December.
- Is SCHD safe? It holds large-cap, stable companies. While not risk-free, it’s relatively conservative.
- Can SCHD drop in value? Yes, like all ETFs, it can fluctuate—but dividend focus helps during volatility.
- Is SCHD better than VOO? Depends. SCHD is for income, VOO is for growth. Many investors own both.
- Minimum investment? Just one share—about $75 (as of May 2025).
- Is it good for retirement? Yes, it’s popular in IRAs and retirement accounts.
Conclusion
SCHD offers a compelling option for investors who want both income and growth. Its strong dividend history, low fees, and reliable holdings make it one of the best dividend ETFs on the market.
If you’re building a long-term portfolio, consider giving SCHD a place in it. It might just be the simple, powerful tool you’ve been looking for.
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