The market is hitting new highs with the tech industry leading the way. Several portfolios have generated significant returns and rewarded shareholders. While growth can enjoy a long stretch of performance, it may not last forever. This is why diversifying into exchange-traded funds (ETFs) can be a smart move. They’re low-cost, easy to buy and sell like stocks, and track an index.
The Schwab U.S. Dividend Equity ETF (SCHD | SCHD Price Prediction) is one of the most popular ETFs today, and everyone’s watching it. The fund is built on stocks with steady cash flow and rising dividends, instead of stocks chasing revenue growth. Here’s why SCHD remains a top ETF in the current market.
Top dividend stocks
SCHD holds 100 companies that have a record of raising dividends. It not only chooses dividend-paying companies but only those that have the ability to keep raising them. The ETF tracks the Dow Jones U.S. Dividend 100 Index that screens a company for its financial strength and dividend track record. This way, you’ll only own elite dividend stocks in your portfolio. The fund rebalances each quarter, which means you’ll never have to worry about holding a stock for too long. You’ll only get to own businesses that have strong balance sheets and steady cash flows. They have the ability to withstand the market ups and downs while growing their payouts.
Steady yield
SCHD has a yield of 3.81%, which is attractive and better than the S&P 500’s 1.25%. If you reinvest the dividends, you can keep growing your investment. The fund has generated an annualized return of 11.77% in five years and 12.30% over the last decade.
The fund has $72.8 billion in assets under management and is a leading ETF of 2025. With an expense ratio of only 0.06%, most of the returns will stay with you.
Well-balanced portfolio
Many ETFs today are tilted towards the tech industry and have heavy allocation to the Magnificent Seven. If the market dynamics shift, this concentration can become an issue. This is where SCHD stands out. The fund has the highest allocation towards the energy sector (19.23%), followed by consumer staples (18.81%), healthcare (15.53%), and industrials (12.50%). If you’re willing to look beyond AI stocks, SCHD will not disappoint.
No stock has a weightage higher than 5%, and you’ll see some of the top dividend payers in the top 10, such as PepsiCo, Verizon Communications, Chevron, and Home Depot. These companies have rewarded investors despite a market slump, and they will continue to do so. Let’s take a look at the top 10 holdings and their yield.
|
Stock |
Weight in ETF |
Recent Yield |
|
Chevron |
4.31% |
4.42% |
|
AbbVie |
4.29% |
3.12% |
|
Altria Group |
4.27% |
6.41% |
|
Home Depot |
4.26% |
2.22% |
|
PepsiCo |
4.15% |
3.98% |
|
Merck |
4.13% |
3.83% |
|
ConocoPhillips |
4.09% |
3.40% |
|
Cisco Systems |
4.00% |
2.44% |
|
Verizon Communications |
3.85% |
6.33% |
|
Bristol Myers Squibb |
3.77% |
5.25% |
*As on September 10, 2025.
SCHD is a perfect investment for those who want to make their money work for them. The index will do all the work for you and ensure quarterly income.
One for the long term
While SCHD may not make headlines like a hot tech stock, it offers the perfect blend of income and long-term growth. This is one ETF that will reward you in more than one way. Its NAV has soared over 46% in the past five years.
It is the perfect blend of income and growth.
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