Core Viewpoint - The Schwab US Dividend Equity ETF (SCHD) offers a convenient investment option for dividend investors, allowing them to benefit from a diversified portfolio without the need for extensive stock-picking efforts [2][10]. Group 1: ETF Overview - The Schwab US Dividend Equity ETF is an index-tracking fund that follows the Dow Jones U.S. Dividend 100 index, which includes stocks that have increased dividends for at least 10 consecutive years [3][4]. - The index excludes real estate investment trusts (REITs) and uses a composite score based on metrics such as cash-flow-to-total-debt ratio, return on equity, dividend yield, and five-year dividend growth to select the top 100 companies [5][6]. Group 2: Investment Appeal - The ETF provides a dividend yield of approximately 3.9%, which, while not the highest available, offers a well-diversified portfolio that combines both income and growth potential [7][8]. - The expense ratio of the Schwab US Dividend Equity ETF is notably low at 0.06%, making it an attractive option given the comprehensive screening and management it provides [10]. Group 3: Market Position - Although the ETF has recently lagged behind the S&P 500 index, it remains a suitable choice for dividend-focused investors, especially since many of the S&P 500's gains are driven by large technology companies that typically do not offer high yields [11][12].
Should You Buy the Schwab US Dividend Equity ETF Instead of Picking Individual Stocks?
The Motley Foolยท2025-08-30 10:56