The Schwab US Dividend Equity ETF (NYSEARCA:SCHD ) is often seen as the gold standard for dividend ETFs.
Schwab US Dividend Equity ETF (SCHD -0.58%) offers a 3.7% dividend yield, which might fall a little shy of the yield that dividend investors are looking for. And for that reason, it could be flying under investor radar screens even though it is a very compelling dividend-focused exchange-traded fund (ETF).
Recent Trump administration tariffs and tax policies could have conflicting impacts on the Schwab U.S. Dividend Equity ETF™. SCHD's top sector allocations are heavy energy and consumer staples exposure. Tax cuts may favor SCHD's top holdings more than those of the tech-heavy SPY, as SCHD companies typically have higher effective tax rates and more domestic focus.
The Schwab US Dividend Equity ETF (NYSEARCA:SCHD) is one of the most well-known dividend ETFs.
All of us could use a little more monthly income; it's not just for retired folks anymore.
The Schwab U.S. Dividend Equity ETF is not for everyone, but for some investors, it is pure gold. Especially as market valuations rise and AI/growth "flash mobs" continue to form, reminiscent of the meteoric rise and fall of certain growth and technology stocks during the COVID bubble. This report reviews the SCHD strategy, including its attractive qualities and big risks, and then concludes with my strong opinion on investing (hint: SCHD is for winners).
The Schwab U.S. Dividend Equity ETF has underperformed SPY recently, but delivers strong, growing dividends with a 3.87% yield and a 13-year growth streak, doing exactly what it is designed to do. SCHD's value orientation (portfolio P/E ~17x currently) and low fees make it attractive versus SPY's stretched valuations, fitting an income-focused strategy. We use the option wheel on SCHD for providing more consistent 'income' nearly every single month, along with our core long position that sits back and collects the dividend passively.
The Schwab U.S. Dividend Equity ETF offers stable, growing dividends and tends to have lower risk than broader market indices, though recent performance has lagged growth-focused funds with zombie-like movement. Current sector weightings—especially energy, consumer defensive, and healthcare—have contributed to 2025 underperformance, but the ETF remains diversified and stable. SCHD's weakness and strength is its defensive, value-oriented holdings and is not the place for those thirsty for high growth or yield chasing.
Schwab U.S. Dividend Equity ETF™ remains my top defensive pick, offering superior dividend quality and liquidity versus VIG and VYM, despite recent underperformance versus the S&P 500. The SCHD ETF's low technology exposure and focus on defensive sectors provide a strong buffer against potential market corrections and AI-driven volatility. Persistent inflation, hawkish Fed policy, geopolitical tensions, and seasonal market weakness all reinforce my preference for SCHD as a safe haven.
SCHD offers higher current income and diversification away from mega-cap tech, but its heavy energy exposure and reconstitution risks may limit future dividend growth. VIG prioritizes dividend growth and total return, outperforming SCHD over most timeframes, but yields less income and overlaps with broad market ETFs like VOO/QQQ. SCHD is best for investors seeking immediate, stable income and lower drawdowns, while VIG suits those focused on long-term capital appreciation and sustainable dividend growth.
I present a $50,000 dividend portfolio with SCHD as the core, enhanced by high-yield picks, funds, and dividend growth stocks for diversification. This portfolio addresses SCHD's sector gaps by adding exposure to Real Estate, Materials, Utilities, and Communication Services, improving risk-reward balance. The portfolio achieves a 5.88% Weighted Average Dividend Yield [TTM] and a 5.56% 5-Year Dividend Growth Rate [CAGR], while reducing company and sector concentration risks.
Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Schwab U.S. Dividend Equity ETF (SCHD) is a passively managed exchange traded fund launched on October 20, 2011.