Schwab U.S. Dividend Equity ETF (SCHD): How to Buy

By Matthew DiLallo – Updated Jun 1, 2025 at 8:23 PM | Fact-checked by Frank Bass

Key Points

Schwab U.S. Dividend Equity ETF focuses on high-yield dividend stocks that grow their payouts.
It offers broad sector diversification and a low expense ratio of 0.06%.
The ETF has historically outperformed large-cap value stocks.

Schwab U.S. Dividend Equity ETF (SCHD +0.15%) 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).

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NYSEMKT: SCHD

Schwab U.S. Dividend Equity ETF

Today's Change

(0.15%) $0.04

Current Price

$27.03

Key Data Points

Market Cap

$0B

Day's Range

$26.99 - $27.17

52wk Range

$23.87 - $29.72

Volume

25K

Avg Vol

Gross Margin

0.00%

Dividend Yield

N/A

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.

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Exchange-Traded Fund (ETF)

An exchange-traded fund, or ETF, allows investors to buy many stocks or bonds at once.

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Blackboard covered in financial and stock market doodles with the word Dividends in the center. — Image source: Getty Images.

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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.

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ETF Expense Ratio

Annual fee as a percentage of assets that an Exchange-Traded Fund charges investors for management and operational costs.

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.

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Data source: Schwab.
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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About the Author

Matt DiLallo has been a contributing Motley Fool stock market analyst specializing in covering dividend-paying companies, particularly in the energy and REIT sectors, since 2012. He also covers pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.

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Charles Schwab is an advertising partner of Motley Fool Money. Matt DiLallo has positions in Coca-Cola, ConocoPhillips, Schwab U.S. Dividend Equity ETF, and Verizon Communications. The Motley Fool recommends Charles Schwab, Lockheed Martin, and Verizon Communications and recommends the following options: short June 2025 $85 calls on Charles Schwab. The Motley Fool has a disclosure policy.