High-quality U.S. dividend stocks with low fees and strong fundamentals
The Schwab U.S. Dividend Equity ETF (SCHD) offers exposure to high-dividend-paying U.S. companies with a proven record of financial strength and consistent growth. For income-focused investors, SCHD delivers a blend of yield, quality, and performance.
📌 Table of Contents
✅ SCHD ETF Overview
🧠 Investment Strategy & Structure
💼 Top Holdings
📈 Performance Overview
🔍 Pros & Cons
✅ Conclusion
🏷️ Recommended Tags
✅ 1. SCHD ETF Overview
| ETF Name | Schwab U.S. Dividend Equity ETF |
| Ticker | SCHD |
| Issuer | Charles Schwab |
| Inception Date | October 20, 2011 |
| Expense Ratio | 0.06% (very low) |
| Index Tracked | Dow Jones U.S. Dividend 100 Index |
| Theme | Dividend Growth, U.S. Equity |
📌 SCHD focuses on dividend-paying U.S. companies with strong profitability, cash flow, and track records of shareholder return.
🧠 2. Investment Strategy & Structure
- Tracks the Dow Jones U.S. Dividend 100 Index
- Focuses on high-dividend-yielding stocks with strong fundamentals
- Companies must have 10+ years of consistent dividends
- Sector exposure is capped to maintain balance
- Rebalanced annually
📌 SCHD is ideal for income investors seeking sustainable dividend growth and quality screening.
💼 3. Top Holdings (as of mid-2025)
| 1 | Broadcom (AVGO) | 4.6% | Semiconductors |
| 2 | Cisco Systems (CSCO) | 4.2% | Technology |
| 3 | PepsiCo (PEP) | 4.0% | Consumer Staples |
| 4 | Merck & Co. (MRK) | 3.9% | Healthcare |
| 5 | Home Depot (HD) | 3.8% | Consumer Discretionary |
| 6 | Pfizer (PFE) | 3.7% | Healthcare |
| 7 | Coca-Cola (KO) | 3.6% | Consumer Staples |
| 8 | Texas Instruments | 3.4% | Semiconductors |
| 9 | Verizon (VZ) | 3.3% | Communication |
| 10 | Amgen (AMGN) | 3.2% | Biotechnology |
📌 SCHD provides diversified dividend exposure across defensive and cyclical sectors.
📈 4. Performance Overview
| YTD (2025) | +7.8% |
| 1-Year | +13.4% |
| 3-Year Avg. | +8.1% |
| 5-Year Avg. | +9.6% |
| 10-Year Avg. | +10.1% |
| Dividend Yield | ~3.5% (as of 2025) |
📌 SCHD’s dividend yield + total return makes it a favorite among income and retirement investors.
🔍 5. Pros & Cons
| Attractive dividend yield (~3.5%) | Limited exposure to high-growth tech stocks |
| Low expense ratio (0.06%) | Heavily weighted in value stocks |
| Focus on high-quality companies | Not ideal for short-term speculation |
| Strong long-term track record | Sector exposure caps can limit flexibility |
| Suitable for income + reinvestment strategy | May underperform in momentum-driven markets |
✅ 6. Conclusion
The SCHD ETF is one of the most reliable and efficient dividend ETFs on the market. With its rigorous screening, low fees, and stable dividend income, it’s a powerful tool for long-term investors focused on income and total return.
📌 If you're building a retirement portfolio, SCHD offers predictable cash flow, capital growth, and peace of mind.