Should Schwab U.S. Dividend Equity ETF (SCHD) Be on Your Investing Radar?

Core Viewpoint - The Schwab U.S. Dividend Equity ETF (SCHD) is a leading investment option for exposure to the Large Cap Value segment of the U.S. equity market, with significant assets and low expense ratios, making it attractive for long-term investors [1][4][10]. Group 1: ETF Overview - SCHD is a passively managed ETF launched on October 20, 2011, and is sponsored by Charles Schwab, with assets exceeding $69.99 billion [1]. - The ETF aims to match the performance of the Dow Jones U.S. Dividend 100 Index, which focuses on high dividend yielding stocks with a strong record of dividend payments [7]. Group 2: Investment Characteristics - Large cap companies, defined as those with market capitalizations above $10 billion, are generally more stable and exhibit predictable cash flows compared to mid and small cap companies [2]. - Value stocks, which typically have lower price-to-earnings and price-to-book ratios, have historically outperformed growth stocks in long-term performance, although growth stocks may excel in strong bull markets [3]. Group 3: Costs and Performance - SCHD has an annual operating expense ratio of 0.06%, positioning it among the least expensive ETFs in its category, and it offers a 12-month trailing dividend yield of 3.81% [4]. - As of August 11, 2025, SCHD has gained approximately 0.25% year-to-date and 4.36% over the past year, with a trading range between $24.32 and $29.53 in the last 52 weeks [8]. Group 4: Sector Exposure and Holdings - The ETF has a significant allocation to the Consumer Staples sector, comprising about 19.8% of the portfolio, followed by Energy and Healthcare [5]. - Texas Instruments Inc (TXN) is the largest holding at approximately 4.33% of total assets, with the top 10 holdings accounting for about 40.3% of total assets under management [6]. Group 5: Alternatives and Market Position - SCHD holds a Zacks ETF Rank of 2 (Buy), indicating strong expected returns based on various factors, making it a compelling choice for investors interested in the Large Cap Value segment [10]. - Other comparable ETFs include the Vanguard High Dividend Yield ETF (VYM) and the Vanguard Value ETF (VTV), with VYM having $62.20 billion in assets and VTV at $139.70 billion, both with competitive expense ratios [11].