ETFs offer an ideal combination of steady income and capital appreciation. These Schwab and Vanguard ETFs are great options for protecting your investments from inflation during uncertain economic times.
The Schwab U.S. Dividend Equity ETF (SCHD -0.42%) is a popular index fund, tied to the Dow Jones U.S. Dividend 100 index. The index and fund focus on generous, high-quality dividend policies.
Uncertainty dominates the current economic landscape, with trade, inflation, rates, and geopolitics all adding risk to equities and bonds. High-growth equities and high-risk assets face greater downside risk, given record valuations and tight credit spreads amid economic flux. SCHD stands out as a compelling hedge, offering a 3.8% dividend yield and strong historical dividend growth at reasonable valuations.
The world of dividend investing is one I think is worth exploring. Even for the most growth-conscious investors out there, receiving some return on capital from time to time is important.
SCHD underperformed the S&P 500 in 2025 but remains highly attractive due to its strong risk-reward profile and dividend growth potential. By combining SCHD with RQI, PDI, and selected high-yield stocks, we boost the portfolio's Weighted Average Dividend Yield [TTM] to 5.88% while enhancing sector diversification. The portfolio addresses SCHD's sector gaps, notably adding Real Estate and Utilities, and achieves global diversification with companies from France and Brazil.
Key Points It’s definitely possible to grow $10,000 over time with dividend investing. You can use low-fee dividend-paying ETFs to help keep your costs low. Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; get started by clicking here.(Sponsor) If you’ve saved up $10,000 to invest in dividend stocks, congratulations. You’re ready to embark on a potentially profitable journey that will reward patience and prudence with time-tested wealth-building opportunities. Among the most important guidelines for a $10,000 dividend portfolio is to keep your costs down. Otherwise, your profits could turn into losses over the long run. The good news is that there are ways to save money, time, and effort with specific dividend portfolio building strategies. You’ll be amazed to discover how far you can stretch a $10,000 investment account if you proceed with prudence and due diligence. No Need to Pick Stocks There was a time, not too long ago, when high fees made picking individual stocks an expensive proposition. If you had a $10,000 investment account, the fees/commissions for buying and selling stocks could have noticeably reduced your portfolio’s value. Nowadays, however, the fees/commissions for buying and selling stocks and exchange traded funds (ETFs) are typically very low or even nonexistent. This raises two significant points. First, you’ll want to choose a reputable low-cost broker if you have $10,000 to invest. The second point is that you may be tempted to buy hundreds of individual stocks because the high-fee barrier has been eliminated. Yet, it’s not necessarily a great idea to embark on a dividend stock picking journey. Bear in mind that stock picking involves time and research. Besides, you might not have the expertise or the confidence to successfully build your $10,000 portfolio with individual dividend stocks. A simple solution is to select a handful of dividend ETFs so you won’t have to do any stock picking. Just make sure that they’re low-fee ETFs that hold a variety of well-known dividend-paying stocks. High Quality Without High Costs If you have $10,000 to invest, you could go through the trouble of selecting 100 or more dividend stocks for a fully diversified portfolio. Or, you could just put $2,500 into four ETFs, or instead put $2,000 into five ETFs. To make it easier for you, I’ll point out a half-dozen diversified dividend-paying ETFs with annual operating fees below 1%. These are the Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD), the JPMorgan Equity Premium Income ETF (NYSEARCA:JEPI), the JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ), the NEOS NASDAQ-100 High Income ETF (NASDAQ:QQQI), the NEOS S&P 500 High Income ETF (BATS:SPYI), and the Amplify CWP Enhanced Dividend Income ETF (NYSEARCA:DIVO). You can go here to read my overview of QQQI, JEPQ, SCHD, DIVO, and SPYI. Then, you can go here to get my summary of JEPI. For now, here’s a bullet-point recap of this six-pack of diversified dividend-stock ETFs: SCHD: Focuses on the Dow Jones U.S. Dividend 100 Index; includes around 100 large-cap stocks; annual distribution (dividend) yield of 3.97%; annual operating fees (automatically deducted from the ETF’s share price) of 0.06% JEPI: Focuses on carefully selected S&P 500 members; includes 122 stocks; annual yield of 8.25%; annual operating fees of 0.35% JEPQ: Focuses on the technology-heavy NASDAQ 100 index; includes 108 stocks; annual yield of 11.52%; annual operating fees of 0.35% QQQI: Focuses on the NASDAQ 100 stock index; includes approximately 100 stocks; annual yield of 14.65%; annual operating fees of 0.68% SPYI: Focuses on constituents of the S&P 500; includes roughly 500 stocks; annual yield of 12.15%; annual operating fees of 0.68% DIVO: Focuses on large-cap dividend and earnings growers; includes 25 stocks; annual yield of 4.73%; annual operating fees of 0.56% These ETFs typically include established blue-chip stocks like Microsoft (NASDAQ:MSFT), Mastercard (NYSE:MA), Walmart (NYSE:WMT), Coca-Cola (NYSE:KO), Home Depot (NYSE:HD), and McDonald’s (NYSE:MCD). Feel free to investigate the six low-fee ETFs I mentioned above along with other dividend-paying funds that meet your criteria. Strong Performance Doesn’t Have to Be Expensive So far, we’ve looked for ETFs featuring high-quality large-cap stock holdings, good diversification, and low annual operating fees. Plus, these funds usually cost less than $100 per share, so they should easily fit into a $10,000 portfolio. The final piece of the puzzle is to make sure that you’re picking ETFs that not only pay dividends, but also have share prices that increase over time. Otherwise, you could end up losing money overall even if you’re collecting dividend payments. To provide an example, you’ll notice that the SCHD ETF’s share price has increased dramatically over the years, and these gains don’t even include the dividend payments: Another example is the JEPI ETF, which has had its ups and downs but has still delivered substantial share-price gains (not including dividends): By making equal-sized contributions to four, five, or even six dividend ETFs, you could aim for both share-price growth and consistent dividends. With the right plan in place, you can maximize the profit potential of your $10,000 dividend portfolio while keeping your costs to an absolute minimum.The post How to Build a Super Low-Cost Dividend Portfolio for $10,000 appeared first on 24/7 Wall St..
SCHD offers a compelling blend of 3% yield, long-term dividend growth, and broad diversification for income-focused investors. Despite recent underperformance, SCHD's 10% annualized dividend growth and defensive sector allocation support its long-term value proposition. Robust fund inflows and a strong track record of NAV and dividend growth reinforce SCHD's appeal as a core holding for passive income portfolios.
If you're looking for a high yield ETF that can still grow at a respectable rate, you'll probably want to look no further than the Schwab US Dividend Equity ETF (NYSEARCA:SCHD).
SCHD has underperformed the S&P 500 and failed to act defensively during recent market corrections, prompting me to sell my position. Top holdings face significant headwinds: weak oil prices, drug price controls, tariffs, and a declining U.S. dollar impacting multinational profits. Persistently high interest rates and a lack of Fed dovishness further dampen the outlook for dividend stocks in Schwab U.S. Dividend Equity ETF's portfolio.
Dividend investing is under criticism, as growth stocks outperform, but market cycles suggest caution is warranted at this stage of the bull market. SCHD's quality-focused approach sets it apart from other high-yield ETFs, as it focuses on financial strength and strong fundamentals. Historical double-digit dividend growth unlikely to continue, given the exposure to cyclicals and healthcare.
SCHD is my favorite dividend growth ETF. I break down its strengths and weaknesses. I also share which stocks and funds I would buy alongside SCHD to build a powerful dividend machine.
Financial markets are a complex flow chart for those who understand how to read demand and supply within the broader context, where everything ties back to the concept of a benchmark. This can affect many spaces equally, but also differently at the same time.