SCHY Provides Exposure To International, Dividend-Paying Stocks

Core Insights - The Schwab International Dividend Equity ETF (SCHY) is a passively managed fund aimed at tracking the Dow Jones International Dividend 100 Index, providing low-cost, income-oriented international exposure with a 3.72% dividend yield [2][3][10] Fund Overview - SCHY was launched on April 29, 2021, by Charles Schwab, with an expense ratio of 8 basis points and approximately $1.3 billion in assets under management (AUM) [3][15] - The fund has an average daily trading volume of 364,000 shares, indicating minimal spread risk for investors [3] - SCHY is fully invested in international equities, comprising 103 holdings, primarily mid- to large-cap stocks [7] Performance Metrics - Cumulative returns for SCHY show a year-to-date increase of 18.60% and a one-year return of 12.14% [4] - The fund's annualized return since inception is 5.57%, which is lower compared to peer strategies [4][15] Index and Stock Selection - SCHY is indexed to the Dow Jones International Dividend 100 Index, which includes mid- and large-cap international dividend-paying companies, excluding REITs [5] - The stock screening process involves evaluating fundamental qualities such as free cash flow, return on equity, indicated dividend yield, and 5-year dividend growth rate [5][14] Portfolio Composition - The top three country exposures in SCHY are the UK (15.36%), Australia (12%), and France (11.65%) [7] - The portfolio is heavily weighted towards financials (15%) and consumer staples (14.84%) [7] - The top 10 holdings account for 40% of the total portfolio weight, with British American Tobacco, Wesfarmers, and BHP Group being the largest positions [8] Distribution and Income Strategy - SCHY pays a quarterly distribution rate of $1.05 per share, yielding 3.72% on a trailing twelve-month basis, and has shown annual growth in distributions since inception [10][12] - The fund is suitable for passive income strategies and can be beneficial for tax-deferred accounts like IRAs or 401(k)s [12] Competitive Landscape - SCHY is noted as the lowest-cost strategy among its peers, with a significant AUM of $1.3 billion, although it has underperformed compared to other international dividend income strategies [15] - The Global X MSCI SuperDividend EAFE ETF (EFAS) is highlighted as a top-performing peer, despite its smaller AUM of $30 million [16]