Verdict Box
- Our Rating: ★★★★½ (4.5/5)
- Best For: Long-term investors who want a low-cost, quality-screened U.S. dividend portfolio
- Not Ideal For: Investors seeking maximum growth exposure, very high current income, or REIT and utility holdings
- Expense Ratio: 0.06%
- Our Take: SCHD combines a low fee, a rules-based quality screen, and a yield above most broad dividend peers, and it has tracked its index closely. Its sector tilts and 100-stock concentration are trade-offs worth understanding before investing.
Table of Contents
What Is the Schwab U.S. Dividend Equity ETF (SCHD)?
The Schwab U.S. Dividend Equity ETF (SCHD) is an exchange-traded fund issued by Charles Schwab Investment Management. If you are asking what is SCHD ETF, it is a passively managed fund holding roughly 100 large U.S. companies with long dividend track records and sound financial profiles. It tracks the Dow Jones U.S. Dividend 100 Index, which screens for companies that have paid dividends for at least ten consecutive years. It then ranks them on measures such as cash flow to debt, return on equity, dividend yield, and five-year dividend growth. REITs are excluded, and the index caps individual stock and sector weights at rebalancing. SCHD launched on October 20, 2011, is structured as an open-end fund, and pays dividends quarterly. Its 0.06% expense ratio is low for a dividend-focused strategy.
SCHD ETF Key Facts
| Item | Detail |
|---|---|
| Full name | Schwab U.S. Dividend Equity ETF |
| Ticker | SCHD |
| Issuer | Charles Schwab Investment Management |
| Benchmark index | Dow Jones U.S. Dividend 100 Index |
| Inception date | Oct 20, 2011 |
| Expense ratio | 0.06% |
| AUM | ~$107.9 billion |
| Average volume | ~23.0 million shares/day |
| Dividend yield | ~3.24% indicated (10/21/2026); trailing 12-month ≈3.0% |
| Dividend frequency | Quarterly |
| Structure | Open-end fund |
SCHD ETF Performance
As of October 20, 2026, SCHD had returned 33.0% over one year and 18.8% annualized over three years, according to Yahoo Finance. Its five-year annualized return was 10.0% and its ten-year annualized return was 13.2%, both as of September 10, 2026.
| Period | SCHD | Dow Jones U.S. Dividend 100 Index |
|---|---|---|
| 1-Year | +33.0% | +32.5% |
| 3-Year (annualized) | +18.8% | +18.7% |
| 5-Year (annualized) | +10.0% | +10.1% |
| 10-Year (annualized) | +13.2% | +13.6% |
The fund finished 0.5 percentage points ahead of the index over one year and 0.1 ahead over three years. It trailed by 0.1 over five years and 0.4 over ten. Gaps of this size can stem from fees, trading costs, index-return methodology, and differing measurement dates, so tracking error appeared modest. These results reflect a strong stretch for dividend-oriented stocks. Past performance is not a guarantee of future results, and returns in any single calendar year can differ widely from these long-term averages.
SCHD Top Holdings and Sector Breakdown
SCHD’s top ten holdings made up about 41.5% of the fund as of October 2026, a moderate level of concentration for a 100-stock portfolio. The index is weighted by float-adjusted market capitalization, with caps on single stocks and sectors at rebalancing, which is why no position exceeded roughly 4.4%. The sector mix tilted toward Consumer Defensive, Healthcare, Technology, and Energy, while Utilities and Real Estate were nearly absent. Compared with broad U.S. market funds, that composition leans toward established, cash-generative businesses and away from the largest growth stocks. Holdings and weights change at each rebalance.
| Rank | Holding | Weight |
|---|---|---|
| 1 | Texas Instruments (TXN) | 4.39% |
| 2 | Procter & Gamble (PG) | 4.33% |
| 3 | Chevron (CVX) | 4.29% |
| 4 | Coca-Cola (KO) | 4.29% |
| 5 | ConocoPhillips (COP) | 4.29% |
| 6 | Qualcomm (QCOM) | 4.14% |
| 7 | UnitedHealth Group (UNH) | 4.13% |
| 8 | Home Depot (HD) | 3.94% |
| 9 | Amgen (AMGN) | 3.89% |
| 10 | PepsiCo (PEP) | 3.85% |
| Sector | Weight |
|---|---|
| Consumer Defensive | 20.07% |
| Healthcare | 19.33% |
| Technology | 15.98% |
| Energy | 15.35% |
| Financial Services | 9.18% |
| Industrials | 7.31% |
| Consumer Cyclical | 6.73% |
| Communication Services | 5.95% |
| Utilities | 0.09% |
| Real Estate | 0.00% |
SCHD ETF Pros and Cons
Pros
- Low cost: At 0.06%, annual fees run about $6 per $10,000 invested.
- Quality screens: Selection draws on dividend history, cash flow to debt, and return on equity, not yield alone.
- Competitive yield: The ~3.24% indicated yield sat above the roughly 1.5%–2.3% yields recently reported for several large dividend-growth and high-yield peers.
- Capped weights: Single-stock and sector caps limit how much any one name can drive results.
- Scale and liquidity: About $107.9 billion in assets and ~23.0 million shares traded daily make entering and exiting positions straightforward.
Cons
- Concentration: Roughly 100 holdings, with the top ten near 41.5%, is narrower than a total-market fund.
- Sector tilts: Consumer Defensive, Healthcare, and Energy together made up about 55% of the fund.
- Growth gaps: Minimal Utilities and Real Estate exposure and a limited weighting in the largest growth stocks may mean lagging in growth-led rallies.
- Income is not guaranteed: Dividends can be cut, and distributions are generally taxable in non-retirement accounts.
Who Should Invest in SCHD?
Is SCHD a good investment? That depends on goals, time horizon, and what a portfolio already holds.
SCHD may be a good fit if you:
- Want a core or satellite U.S. equity holding with an income emphasis
- Prefer rules-based quality screens over simple highest-yield selection
- Reinvest dividends and can hold through market cycles
- Are cost-conscious and value a 0.06% expense ratio
- Hold growth-heavy funds and want a value-leaning counterweight
SCHD may not be ideal if you:
- Need the highest possible current yield, since higher-yield strategies exist
- Want broad exposure to all 11 sectors, including Real Estate and Utilities
- Seek maximum participation in large-cap technology growth
- Are uncomfortable with sector concentration in defensive and energy stocks
SCHD Alternatives
| ETF | Expense Ratio | AUM | Key Difference |
|---|---|---|---|
| Vanguard High Dividend Yield ETF (VYM) | 0.04% | ~$81.5B | Roughly 600 holdings; broader and higher in Financials |
| Vanguard Dividend Appreciation ETF (VIG) | 0.04% | ~$111B | Dividend growth focus; lower yield, higher Technology weight |
| iShares Core Dividend Growth ETF (DGRO) | 0.08% | ~$42B | About 390 holdings; weighted by dividend dollars |
VYM casts a wider net with a slightly lower fee but a lower yield (roughly 2.3%). VIG emphasizes ten-plus years of dividend increases, tilting toward technology and a yield near 1.5%. DGRO screens for dividend growth and payout ratio, with a yield near 2.0%, and charges slightly more.
Related reading: [SCHD vs VYM Comparison] | VIG ETF Review | Best Dividend ETFs
Frequently Asked Questions
Is SCHD a good long-term investment?
SCHD may suit long-term investors who value low costs and dividend-focused quality screens. Its ten-year annualized return was 13.2% as of September 10, 2026, but past results do not predict future ones. Suitability depends on your goals, risk tolerance, and existing holdings.
How often does SCHD pay dividends?
SCHD pays dividends quarterly, with distributions typically paid in March, June, September, and December. Amounts vary from quarter to quarter and are not guaranteed.
What is the difference between SCHD and VYM?
SCHD holds about 100 stocks selected through quality screens, while VYM holds roughly 600 and screens mainly on forecast yield. SCHD’s expense ratio is 0.06% against VYM’s 0.04%. SCHD’s indicated yield was higher, and its sector weights lean more toward Consumer Defensive and Healthcare.
Can I lose money investing in SCHD?
Yes. SCHD holds stocks, so its price can fall and you could lose some or all of your principal. Dividend-paying companies can decline in value or cut payouts, and sector concentration can add volatility.
Does SCHD focus on dividend growth or high yield?
Neither exclusively. SCHD requires a ten-year dividend record, then ranks candidates on yield, five-year dividend growth, and financial strength measures. That places it between pure high-yield funds and pure dividend-growth funds.
Data as of October 2026. Sources: issuer websites and finance.yahoo.com.
Disclaimer: The information in this article is for educational and informational purposes only. It does not constitute financial, investment, or tax advice. Past performance is not indicative of future results. Investing in ETFs involves risk, including possible loss of principal. Always consult a qualified financial advisor before making investment decisions.