What Schwab’s SEC Filings Reveal About SCHD’s Holdings

SCHD, the Schwab U.S. Dividend Equity ETF, has changed its holdings far more than most investors realise. Since it launched in 2011, its index has added and removed between nine and 37 companies at each annual reconstitution, and most of its original ten largest holdings have since left the fund. Very little of what is written about SCHD goes back to the documents Schwab is legally required to file with the US Securities and Exchange Commission, which record exactly what the fund owned, what it charged and what it paid out, period by period.

Those filings tell a far more interesting story. They show that Microsoft was once in SCHD, that Coca-Cola, Johnson & Johnson and McDonald’s were all removed in the same year, that only four companies have survived every annual review, and that the fund’s holdings in 2012 looked very different from today’s. This guide sets out what the filings reveal for anyone who owns SCHD or is thinking of buying it.

FRC’s How to Invest in SCHD course is built from these same filings, together with S&P Dow Jones Indices’ index rules and IRS guidance, and reconstructs SCHD’s holdings at every annual reconstitution since 2011. There is a short video on the course page you can watch to decide whether it is right for you.

This guide is part of FRC’s complete guide to SCHD, which starts with what SCHD is and how it works. The holdings changes described below were rebuilt by comparing the full lists of companies in Schwab’s filings before and after each March reconstitution, with name changes, takeovers and share-class switches separated out from genuine index decisions.

Which SEC Filings Cover SCHD?

SCHD is one of the funds in Schwab Strategic Trust, and the trust files several types of document with the SEC. Shareholder reports, filed as Form N-CSR for the full year to 31 August and Form N-CSRS for the half year to the end of February, list every company the fund holds, along with its expenses and performance.

Between those reports, Schwab filed quarterly holdings lists on Form N-Q until 2019, and since then has filed monthly portfolio data on Form N-PORT, with quarterly versions made public. Prospectuses and their supplements, filed on forms such as 485BPOS and 497, record the fund’s fees, risks and any changes to its rules.

Together, these documents give a dated, official record of SCHD’s history. They are public and free to read on the SEC’s EDGAR database, but they are long, technical and spread across multi-fund reports, which is why so few investors ever look at them.

SCHD on Day One

SCHD launched on 20 October 2011 at $25 a share, tracking the Dow Jones U.S. Dividend 100 Index, which had been launched by Dow Jones Indexes that August and back-tested to 1998. Its first prospectus set a fee of 0.17% a year.

Its first shareholder report, covering the period to 29 February 2012, showed around $301 million in net assets and around 100 holdings. In those first four months, the fund returned around 10.5% at net asset value, almost exactly matching its index.

By November 2026, SCHD’s net assets had passed $119 billion, almost 400 times that first figure, and its fee had been cut to 0.06%. A fund that began as one of many new dividend ETFs had become one of the largest in the United States.

SCHD’s 2012 Top Ten and Where They Are Now

The first shareholder report listed SCHD’s ten largest holdings at the end of February 2012 as Intel, Exxon Mobil, Chevron, Procter & Gamble, Coca-Cola, IBM, Johnson & Johnson, Walmart, McDonald’s and PepsiCo. Together, they made up around 42% of the fund.

Of those ten, only four were in SCHD at the end of May 2026: Chevron, Procter & Gamble, Coca-Cola and PepsiCo. And three of those four had left and come back in the meantime, with only PepsiCo holding its place throughout.

Johnson & Johnson and McDonald’s were removed in 2018, Walmart in 2019, Intel in 2020 and Exxon Mobil in 2021, while IBM left in 2012, returned in 2015 and was removed again in 2023. Many investors assume SCHD is a fixed basket of the same blue-chip companies, but the filings show a fund whose make-up has changed substantially over time.

What Every SCHD Investor Needs to Know

Most investors who buy SCHD never look beyond its current top ten holdings, and they have no idea how much the fund has changed or why. Anyone can tell you SCHD’s dividend yield, but do you understand how its index selects companies, why holdings are removed and what drives its dividend payments?

Imagine knowing exactly what you own, why you own it and what could go wrong before it does. We’ve gone beyond internet opinions and recycled investment summaries: How to Invest in SCHD is a 21-chapter course that uses Schwab’s SEC filings, historical holdings data and published index methodology to explain how this fund actually works, with study guides, practice questions and an assessment in each chapter. FRC’s three progressive ETF programmes take your knowledge further, from ETF Investing for Beginners, through ETF Investing Strategies, to Advanced ETF Investing.

FRC’s programmes and memberships are open to everyone, whether you are investing $500 or $500,000, and you can get started for less than the cost of a few shares. The question isn’t whether financial education costs money. It’s what a lack of it could cost you.

Microsoft Was Once in SCHD

Many investors believe SCHD has never held the large technology companies that dominate the S&P 500. The filings show that Microsoft joined SCHD at the 2013 reconstitution and stayed until 2018.

It was removed in 2018 and has not returned. In late 2026, SCHD held none of the so-called Magnificent Seven technology companies, all of which pay small dividends relative to their share prices or none at all.

The Microsoft episode is a reminder of how SCHD’s rules work. A company can qualify when its yield, dividend growth and financial strength rank highly, and later drop out when that ranking changes, even if it remains a highly successful business.

Only Four Companies Have Never Left

According to S&P Dow Jones Indices, only four companies have been members of SCHD’s index at every annual review since it began: Kimberly-Clark, Paychex, PepsiCo and T. Rowe Price.

None of them is among SCHD’s largest holdings today. At the end of May 2026, PepsiCo made up around 3.4% of the fund, Kimberly-Clark around 0.8%, Paychex around 0.8% and T. Rowe Price around 0.6%.

After those four, the longest-serving members include Altria, which has been in 14 reconstitutions, Texas Instruments with 13 and Verizon with 12. Texas Instruments is a good example of how membership can change: it was removed in 2012, returned in 2013 and was SCHD’s second-largest holding by May 2026.

How Many Holdings Does SCHD Have?

SCHD’s index is designed to hold 100 companies, and the fund holds almost all of them. Schwab’s fund page showed 102 holdings in early November 2026, and the number in the filings has ranged from 93 to 101 at different points.

The count moves because the index does not replace companies removed between reviews until the next March reconstitution. Takeovers and spin-offs can also add or remove a holding temporarily, so the number is rarely exactly 100.

More revealing than the count is concentration. At the end of May 2026, SCHD’s ten largest holdings made up around 44% of the fund, led by Qualcomm at around 6.7%, Texas Instruments at around 5.9% and UnitedHealth Group at around 5.1%.

How SCHD’s Sectors Have Changed

The filings also show how much SCHD’s sector mix has moved. At the end of August 2012, consumer staples made up around 29% of the fund, information technology around 7% and financials under 3%.

By the end of September 2026, the three largest sectors were consumer staples at around 20%, health care at around 19% and energy at around 15%. Financials rose from under 3% in 2012 to around 17% before the 2025 review, after the 2020 reshuffle added dozens of banks, then fell back to around 8% after it.

These shifts mean that two investors who bought SCHD years apart may own a noticeably different fund, even though the ticker and the index rules have stayed the same.

The Year SCHD Removed Coca-Cola, Johnson & Johnson and McDonald’s

The 2018 reconstitution was one of the most striking in SCHD’s history. Coca-Cola, Johnson & Johnson, McDonald’s, Boeing and Microsoft were all removed in the same review, alongside more than a dozen other companies.

These were some of the best-known dividend payers in America, and several had been among SCHD’s largest holdings. Their removal reflected the index’s rules, which rank companies each year on cash flow to debt, return on equity, dividend yield and five-year dividend growth, rather than any judgment about their quality.

Coca-Cola returned the following year, in 2019, and was SCHD’s fourth-largest holding at the end of May 2026. Johnson & Johnson and McDonald’s had not returned by that date. FRC’s guide to whether Warren Buffett likes SCHD contrasts SCHD’s treatment of Coca-Cola with Berkshire Hathaway’s decades-long holding.

The 2020 Pandemic Removals

SCHD’s index does not only change in March. Between reviews, it removes any company that skips a scheduled dividend or announces that it will stop paying dividends, although a cut alone does not trigger removal.

The filings show this rule in action in 2020. Between the end of February and the end of May, Darden Restaurants, Macy’s, Nordstrom, Gap and Cracker Barrel were all removed after suspending their dividends as the pandemic closed shops and restaurants, and AVX left after being taken over.

Several came back once their dividends were restored and their records rebuilt. Darden and Cracker Barrel returned in 2023, and Macy’s returned in 2026. Removed companies are not replaced until the next March review, so the fund held only 93 stocks for a period in 2020.

The Biggest Reshuffle in SCHD’s History

The 2020 reconstitution, which took effect later than usual that year, was the largest the filings record. Comparing SCHD’s holdings at the end of May 2020 with those at the end of August, 37 companies were added and 30 removed.

The additions were dominated by banks and financial companies, including US Bancorp, M&T Bank, Regions Financial, Zions Bancorporation and Synovus. Removals included Procter & Gamble, Home Depot, Intel, Lockheed Martin, Target and General Mills.

Most years are less dramatic. The smallest reshuffle in the filings came in 2017, when only nine companies were added and nine removed, while most years have seen somewhere between 12 and 25 additions. The 2026 reconstitution added 25 companies and removed 23.

Was 2026 SCHD’s Biggest Reconstitution?

Many recent articles describe the March 2026 reconstitution as the most dramatic in SCHD’s history. It was certainly large: comparing Schwab’s filings before and after it, 25 companies were added and 23 removed, with Qualcomm, UnitedHealth Group, Procter & Gamble and Abbott Laboratories coming in and AbbVie, Cisco and Valero going out.

But the filings show that 2020 was larger, with 37 additions and 30 removals. Some articles also quote 22 removals for 2026 rather than 23, a difference that comes down to how takeovers and share-class switches between filing dates are counted.

The 2026 change was dramatic in a different sense. Qualcomm and UnitedHealth joined straight into the top three holdings, which is unusual for new additions.

Does SCHD Sell Its Winners Every March?

A popular claim is that SCHD automatically sells companies whose share prices have risen. There is some truth in it, but the rules are more nuanced.

Each year, only companies in the top half of eligible stocks by dividend yield can be selected, and a company’s yield falls when its share price rises faster than its dividend. A company whose price has surged can therefore drop out, even if its business is doing well.

But the index also has a buffer. An existing member stays in as long as it ranks within the top 200 on the composite score, so a company does not drop out just because it slips a little. New companies only fill the places left once existing members have been kept.

Why Were Cisco and AbbVie Removed?

S&P Dow Jones Indices does not publish the reasons for individual additions and removals. It publishes the rules and the results, so any explanation of why a specific company left is an interpretation, not an official statement.

What can be said is that each company is ranked on four measures: cash flow to total debt, return on equity, dividend yield and five-year dividend growth. A company falls out when its combined ranking drops below the level needed to keep its place, or when its yield falls out of the top half of eligible stocks.

Be wary of articles that state a single precise reason for a removal as fact. Unless S&P Dow Jones Indices or Schwab has said so, it is a reasoned guess.

Companies That Left and Came Back

One of the most revealing patterns in the filings is how often companies leave SCHD and later return. Home Depot was removed in 2016, returned in 2017, left again in 2020 and came back in 2021.

Chevron, one of SCHD’s largest holdings in 2012, was removed in 2017 and added back in 2023. Qualcomm joined in 2015, was removed in 2021 and returned in 2026 as the fund’s largest holding, at around 6.7% at the end of May 2026. Procter & Gamble left in 2020 and returned in 2026, and Merck was removed in 2024 and added back in 2025.

These moves are not a sign of indecision. They reflect a rules-based index re-ranking every eligible company each year, so a company can fall out when its yield or dividend growth slips and come back when it improves.

SCHD’s Companies Incorporated Abroad

SCHD only holds companies listed on US stock exchanges, but not all of them are incorporated in the United States. The filings show it has held companies such as Eaton, incorporated in Ireland, Garmin in Switzerland, Lazard in Bermuda, Accenture in Ireland and LyondellBasell in the Netherlands.

These are large companies with major US operations and shares that trade on US exchanges, which is why they can qualify for the index. Dividends from foreign companies whose shares trade on a major US exchange can generally still be treated as qualified dividends for US tax purposes.

FRC’s guide to how SCHD dividends are taxed explains the rules on qualified dividends in detail.

How Much SCHD Trades Its Holdings

Schwab reports SCHD’s portfolio turnover, the share of the fund bought and sold in a year, in its prospectus and on its fund page. It was 17% in the fund’s first fiscal year to August 2012, 46% for the year to August 2021, 30% for the year to August 2025 and around 41% for the twelve months to September 2026.

Those figures are high for an index fund, because SCHD’s index replaces a large share of its companies every year. They are still low compared with many actively managed funds, and the trading costs involved are included in the fund’s returns rather than charged separately.

Turnover also has tax consequences in many funds. Because ETF shares can be created and redeemed in kind, none of SCHD’s distributions since at least December 2016 has included capital gains, despite these changes.

SCHD’s Fee Has Been Cut Twice

SCHD’s prospectus and its supplements record two fee cuts. The fund launched at 0.17% a year, cut its fee to 0.07% on 20 September 2012, less than a year after launch, and cut it again to 0.06% on 11 March 2019.

At 0.06%, an investor pays around $6 a year for every $10,000 invested. No fee waiver appears in the filings, so the fee stated has been the fee charged.

SCHD was not among the Schwab ETFs whose fees were cut in June 2025 or June 2026, so its fee has stayed at 0.06% for more than seven years. Many summaries describe only the cut from 0.07% to 0.06%, but the filings show the larger cut came first, from 0.17% to 0.07% in 2012.

The Rule Change That Capped Every Holding at 4%

When SCHD launched, its index capped any single company at 4.5% of the fund and any sector at 25%. In June 2020, S&P Dow Jones Indices lowered the single-company cap to 4% and switched the sector cap to the standard GICS sector definitions, with the aim of improving diversification.

The cap is applied at each quarterly rebalance, so a company whose shares rise strongly between rebalances can drift above 4%. That is why Qualcomm and Texas Instruments were above 4% at the end of May 2026, and why a single strong share price can briefly give one company more influence over the fund.

FRC’s guide to SCHD’s price history shows how those holdings shaped the fund’s record highs, falls and recoveries.

What SCHD’s Dividends Are Made Of

Schwab’s distribution records show something many investors do not realise: all 40 of SCHD’s distributions from December 2016 to September 2026 were paid entirely from income. None included capital gains, and none was a return of capital.

This is significant, because some income funds keep their payouts high by returning investors’ own money or distributing realised gains. SCHD’s payouts have come from the dividends its companies paid, after its small fee.

Its total annual dividend has risen in every calendar year from 2012 to 2025, from around $0.27 per share in its first full year to around $1.05 in 2025, adjusted for its 2024 three-for-one split. FRC’s guide to SCHD’s dividend growth sets out the year-by-year record.

SCHD’s Best and Worst Quarters

SCHD’s prospectuses report its best and worst calendar quarters. Its worst was the first quarter of 2020, when its total return was −21.55%, and its best was the fourth quarter of 2020, when it returned 17.11%.

Before 2020, its best quarter had been the first quarter of 2013, at 12.93%, and its worst the fourth quarter of 2018, at −10.59%. The pandemic year produced both extremes within nine months of each other.

The same filings record its calendar-year returns, including 32.9% in 2013, −3.2% in 2022 and 4.6% in 2023. Those numbers are a reminder that even a fund built from financially strong companies can move sharply in both directions.

SCHD’s Price Before the Split

The filings and Schwab’s announcements also record the 2024 share split. On 25 September 2024, Schwab announced a three-for-one split of SCHD, applying to shareholders of record on 9 October, with split-adjusted trading starting on 11 October.

Just before the announcement, SCHD’s net asset value was $85.02 per share. After the split, each share was worth around a third of that, and every investor held three times as many shares, so the value of their holding did not change.

Any holdings or dividend figures from before October 2024 need dividing by three to compare them with today’s per-share numbers.

How to Read SCHD’s Filings Yourself

SCHD’s filings can be found on the SEC’s EDGAR database by searching for Schwab Strategic Trust, or through the fund documents page on Schwab Asset Management’s website. The shareholder reports and N-PORT filings contain the full holdings lists, while the prospectus and its supplements contain the fees and rules.

Reading them takes patience. SCHD’s figures sit inside reports covering many Schwab ETFs, company names change over time, and takeovers and spin-offs appear as additions and removals even though they are not index decisions.

Comparing holdings lists across years also means checking each change. A company that seems to disappear may simply have changed its name, as Wal-Mart Stores did when it became Walmart Inc., or been acquired by another company.

If you’re putting your hard-earned money into SCHD without understanding how it works, you’re taking unnecessary financial risks. How to Invest in SCHD has done that work for you, reconstructing the fund’s history from the filings so that every changing figure is dated and every change is checked.

Common Mistakes When Researching SCHD

Assuming today’s top ten is permanent. The filings show that most of SCHD’s 2012 top ten had left the fund by 2026, and several of today’s largest holdings joined only recently.

Relying on screenshots and summaries. Figures shared online are often out of date or taken from before the 2024 share split.

Confusing name changes with removals. Some apparent changes in holdings lists are renames, takeovers or share-class switches rather than index decisions.

Treating a removal as a verdict on a company. SCHD’s index removes companies because of how they rank on its four measures, not because they are bad businesses.

Common Questions

What do SCHD’s SEC filings show? They show the full list of companies SCHD held at each reporting date, its expenses, its performance, its distributions and any changes to its fees and rules, going back to its launch in 2011.

Where can I find SCHD’s SEC filings? On the SEC’s EDGAR database under Schwab Strategic Trust, or through the fund documents page on Schwab Asset Management’s website.

Has SCHD ever held Microsoft? Yes. Schwab’s filings show Microsoft was added at the 2013 reconstitution and removed in 2018.

Which companies have never left SCHD? According to S&P Dow Jones Indices, Kimberly-Clark, Paychex, PepsiCo and T. Rowe Price have been in SCHD’s index at every annual review since it began.

When did SCHD remove Coca-Cola? Coca-Cola was removed at the 2018 reconstitution and added back in 2019.

What were SCHD’s largest holdings when it launched? At the end of February 2012, its ten largest holdings were Intel, Exxon Mobil, Chevron, Procter & Gamble, Coca-Cola, IBM, Johnson & Johnson, Walmart, McDonald’s and PepsiCo.

How much did SCHD have when it launched? Its first shareholder report, for the period to 29 February 2012, showed around $301 million in net assets. By November 2026, it had more than $119 billion.

Has SCHD ever paid a capital gains distribution? Schwab’s distribution records show that all 40 distributions from December 2016 to September 2026 were paid entirely from income, with no capital gains or return of capital.

Does SCHD hold foreign companies? It holds only companies listed on US exchanges, but it has held companies incorporated abroad, such as Eaton and Accenture in Ireland, Garmin in Switzerland and Lazard in Bermuda.

How many holdings does SCHD have? Its index targets 100 companies, and Schwab’s fund page showed 102 holdings in early November 2026. The number moves slightly between reviews because of takeovers, spin-offs and removals.

Was the 2026 reconstitution SCHD’s biggest? It was large, with 25 additions and 23 removals according to Schwab’s filings, but the 2020 reconstitution was larger, with 37 additions and 30 removals.

Does SCHD sell its winners? A company whose share price rises much faster than its dividend can fall out of the top half by yield and be removed, but existing members stay as long as they rank within the top 200, so not every strong performer is sold.

What was SCHD’s price before the split? Its net asset value was $85.02 per share just before the three-for-one split was announced in September 2024.

How many companies change at each SCHD reconstitution? It varies widely. The filings show as few as nine additions and nine removals in 2017 and as many as 37 additions and 30 removals in 2020.

Your Portfolio Deserves an Educated Investor

SCHD’s SEC filings tell the story of a fund that has changed far more than most investors realise. Microsoft came and went, Coca-Cola left and returned, the pandemic removed five well-known names in weeks, and only four companies have survived every review since 2011.

Do you know how SCHD performed during its worst market declines, how its holdings have changed and what really drives its dividends? How to Invest in SCHD examines that historical evidence from Schwab’s own filings, while FRC’s three progressive ETF programmes take you from how ETFs work to managing risk across everything you own. FRC’s programmes and memberships are open to everyone, whether you are investing $500 or $500,000.

Invest in understanding the market before investing in the market itself. Know what the filings say before you decide what the fund is worth to you.