With over $60 billion in assets, SCHD has become the gold standard for dividend ETF investing. Here is everything you need to know before buying.
$63B+
Assets Under Management
3.45%
Current Yield
0.06%
Expense Ratio
103
Total Holdings
The Schwab U.S. Dividend Equity ETF (SCHD) tracks the Dow Jones U.S. Dividend 100 Index, a carefully constructed benchmark that selects 100 high-quality dividend-paying U.S. stocks. Unlike simple high-yield funds, SCHD uses a multi-factor quality screen that filters for financial strength, not just the highest dividend payouts.
Launched in October 2011, SCHD has grown into one of the most popular dividend ETFs in the world, consistently attracting billions in new investor capital each year. Its combination of a low 0.06% expense ratio, strong dividend growth, and quality-focused methodology has made it a core holding for income-focused portfolios.
SCHD does not simply buy the highest-yielding stocks. Its index methodology applies a rigorous four-factor quality screen that sets it apart from most dividend ETFs.
Companies must demonstrate strong cash generation relative to their total debt, ensuring they can sustain dividend payments even during downturns.
High ROE indicates management efficiency and competitive advantages that support long-term dividend sustainability.
Stocks must offer a meaningful yield above the market average, but the yield factor is balanced against quality metrics to avoid yield traps.
Companies must have a track record of growing their dividends over at least five consecutive years, proving commitment to shareholder returns.
To even be considered, a company must have paid dividends for at least 10 consecutive years and meet minimum market capitalization requirements. This pre-screening eliminates speculative high-yielders and ensures only established dividend payers make the cut.
| Company | Ticker | Weight | Sector |
|---|---|---|---|
| Cisco Systems | CSCO | 4.52% | Technology |
| Bristol-Myers Squibb | BMY | 4.38% | Healthcare |
| BlackRock | BLK | 4.31% | Financials |
| Home Depot | HD | 4.28% | Consumer Disc. |
| Chevron | CVX | 4.15% | Energy |
| Verizon Communications | VZ | 4.02% | Telecom |
| Texas Instruments | TXN | 3.98% | Technology |
| AbbVie | ABBV | 3.87% | Healthcare |
| PepsiCo | PEP | 3.76% | Consumer Staples |
| Amgen | AMGN | 3.65% | Healthcare |
Top 10 holdings represent approximately 40.9% of total fund assets. Holdings as of Q1 2026.
| Period | SCHD Return | S&P 500 Return | Difference |
|---|---|---|---|
| 1-Year | 8.2% | 12.4% | -4.2% |
| 3-Year | 7.8% | 10.1% | -2.3% |
| 5-Year | 11.5% | 13.8% | -2.3% |
| 10-Year | 11.1% | 12.5% | -1.4% |
| Since Inception (2011) | 12.8% | 13.9% | -1.1% |
Returns are annualized total returns including reinvested dividends. Past performance does not guarantee future results.
While SCHD has slightly underperformed the S&P 500 on a total return basis (largely due to the tech-heavy bull market), it has done so with notably lower volatility. SCHD's beta of approximately 0.82 means it captures about 82% of market movements, providing a smoother ride for investors who prioritize capital preservation alongside income.
SCHD's dividend growth is where this ETF truly shines. The fund has delivered a compound annual dividend growth rate of approximately 12% since inception -- far outpacing inflation and most competing dividend ETFs.
| Year | Annual Dividend | YoY Growth |
|---|---|---|
| 2020 | $2.0284 | 15.5% |
| 2021 | $2.2489 | 10.9% |
| 2022 | $2.5615 | 13.9% |
| 2023 | $2.6587 | 3.8% |
| 2024 | $2.8194 | 6.0% |
| 2025 | $3.0752 | 9.1% |
Key Insight: A $10,000 investment in SCHD at inception would now generate approximately $1,100+ in annual dividend income, compared to about $350 from a starting yield of 3.5%. That is the power of dividend growth compounding over time.
SCHD maintains a well-diversified sector allocation without over-concentration in any single area. Notably, it has less technology exposure than the S&P 500 but much more than typical high-yield funds, striking a balance between growth and income.
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If you are 10+ years from needing income and want to build a growing dividend stream, SCHD's 12% dividend growth rate means your income roughly doubles every 6 years.
SCHD's quality-focused approach and reasonable 3.45% yield make it suitable for retirees who want dependable quarterly income with inflation protection through dividend growth.
With lower volatility than the S&P 500 and a focus on financially strong companies, SCHD provides equity market participation with a defensive tilt.
Yes. SCHD has delivered strong risk-adjusted returns since its 2011 inception, combining competitive total returns with exceptional dividend growth. Its quality-factor approach and ultra-low expense ratio make it well-suited for long-term buy-and-hold investors.
SCHD pays dividends quarterly, typically in late March, June, September, and December. The fund has increased its annual dividend payout in most years since inception, with a compound growth rate of approximately 12%.
SCHD and VYM serve different purposes. SCHD offers higher dividend growth and a quality-focused approach with ~100 holdings, while VYM provides broader diversification with 500+ stocks and a slightly higher current yield. SCHD has generally outperformed VYM on total returns over the past decade.
Since SCHD is an ETF trading on the NYSE, you can buy a single share (approximately $82-88 in early 2026). Many brokerages also offer fractional shares, allowing you to invest with as little as $1.
No. The Dow Jones U.S. Dividend 100 Index that SCHD tracks explicitly excludes REITs. This is actually a tax advantage since REIT dividends are typically taxed as ordinary income rather than at the lower qualified dividend rate.