Schwab U.S. Dividend Equity ETF (SCHD +0.11%) empowers anyone to invest in the wealth-creating capabilities of dividend stocks. Over the last 50 years, dividend payers have delivered a higher average annualized total return than the equal-weighted S&P 500 index (9.2% versus 7.7%), with less volatility than the broader market. Companies with a history of increasing their dividends have delivered even higher total returns (10.2% annualized).
NYSEMKT: SCHD
Key Data Points
This exchange-traded fund (ETF) focuses on companies with higher dividend yields and consistent records of dividend growth. The fund is an excellent option for investors seeking to generate passive income while also realizing some stock price appreciation as the underlying companies grow in value.
Exchange-Traded Fund (ETF)
Here's everything you need to know about investing in the Schwab U.S. Dividend Equity ETF.
What is the Schwab U.S. Dividend Equity ETF?
The Schwab U.S. Dividend Equity ETF enables you to invest in 100 of the best dividend-paying stocks through a single fund. The ETF aims to closely track the Dow Jones U.S. Dividend 100 Index. The index measures the performance of high-dividend-yielding stocks that trade in the U.S. These companies consistently pay dividends and have fundamentally stronger financial metrics than their peers.
On the other hand, here are some reasons the Schwab U.S. Dividend Equity ETF might not be the best ETF to buy for you:
- You're seeking a more growth-focused investment.
- You want a fixed income stream.
- You want an even higher income yield.
- You'd prefer to invest directly in dividend stocks.
- You already own a lot of dividend stocks.
Does the Schwab U.S. Dividend Equity ETF pay a dividend?
The Schwab U.S. Dividend Equity ETF pays a dividend. In mid-2025, the fund had a trailing-12-month dividend yield of 3.7%, more than double the S&P 500's dividend yield of around 1.3%. The higher dividend yield enables investors to collect more dividend income each year, providing them with a higher base return.
The fund distributes dividend income to investors each quarter. The payments rise and fall based on the dividend income generated by the fund's portfolio, less its expense ratio. While the payments tend to fluctuate from quarter to quarter, they have steadily risen over the years as the companies in the fund have increased their dividends:
What is the Schwab U.S. Dividend Equity ETF's expense ratio?
ETF sponsors like Schwab charge fees known as expense ratios to manage funds on behalf of their investors. The Schwab U.S. Dividend Equity ETF has a 0.06% ETF expense ratio. That's a very low expense ratio for a passively managed ETF; the industry average is about 0.16%.
ETF Expense Ratio
For example, a $10,000 investment in the Schwab U.S. Dividend Equity ETF would incur $6 in management fees each year, about $10 less than other passively managed funds. The fund's lower expense ratio enables investors to keep more of the dividend income generated by the ETF's holdings. Although it might not seem like much at first, it adds up over time.
Historical performance of the Schwab U.S. Dividend Equity ETF
Dividend stocks tend to deliver solid returns over the long term. That has certainly been the case for the Schwab U.S. Dividend Equity ETF over the years:
Fund | 1-Year | 3-Year | 5-Year | 10-Year |
|---|---|---|---|---|
Schwab U.S. Dividend
Equity ETF | 8.04% | 5.90% | 17.32% | 11.44% |
Benchmark
(Large-Cap Value) | 6.62% | 6.86% | 16.55% | 8.91% |
As the table shows, the fund has outperformed its benchmark over the past five- and 10-year periods. However, while it has outperformed its benchmark, the fund has underperformed compared to the S&P 500 during the past decade (12.1%).
Even though the fund has lagged behind the broader market, it provides investors with more income and lower-volatility returns. Those features can make it a solid option for investors seeking an income-focused fund that can still put up good total returns.
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The bottom line on Schwab U.S. Dividend Equity ETF
The Schwab U.S. Dividend Equity ETF makes investing in high-quality dividend stocks easy. The fund owns shares of 100 companies known for their ability to pay above-average and steadily rising dividends. It can provide an instantly diversified portfolio of high-quality dividend stocks that can be a core holding of any investment portfolio.
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