"The Schwab U.S. Dividend Equity ETF (SCHD) has become immensely popular among dividend investors. And it has a lot to show for it. SCHD offers a high yield of about 4%. It also screens for high-quality companies with strong financials and consistency in paying out dividends. And it has maintained a hefty five-year return of over 40%. Plus, you get all this for the very reasonable expense ratio of 0.06%."
"But, SCHD may have some drawbacks. Other funds also invest in high-quality companies and offer higher yields. Some competing funds are also more diversified. In fact, SCHD is not too invested in the tech sector, which has been booming with the help of advances in artificial intelligence (AI). Only about a combined 12% of its portfolio is composed of companies in information technology and communication services. And while it's heavily invested in defensive sectors like consumer staples and healthcare, it lacks in utilities (0.04%)."
The Schwab U.S. Dividend Equity ETF (SCHD) offers about a 4% yield, screens for high-quality companies with strong financials and dividend consistency, and has a five-year return above 40% with a 0.06% expense ratio. SCHD underweights technology and communication services, together composing roughly 12% of the portfolio, and has minimal exposure to utilities (0.04%). Competing ETFs can offer higher yields, different sector mixes, or greater diversification. The Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) yields about 4.02%, targets high yield and low volatility, holds real estate, consumer staples, and utilities, and has roughly $3 billion in assets.
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