The Dividend ETF Millions of Investors Talk About

SCHD is the ticker for the Schwab U.S. Dividend Equity ETF, an exchange-traded fund that owns around 100 established US companies with long records of paying dividends. It tracks the Dow Jones U.S. Dividend 100 Index, charges a very low annual fee, and pays its dividends four times a year.

Investors use SCHD as a single, low-cost way to own a basket of financially strong dividend-paying companies, such as consumer brands, healthcare businesses, energy producers and industrial firms. It has become one of the most popular dividend ETFs in the United States, with well over $100 billion in assets, and one of the most searched-for funds online.

Don’t start investing and then start learning how investing works. FRC’s three ETF programmes, ETF Investing for Beginners, ETF Investing Strategies and Advanced ETF Investing, explain how dividend ETFs like SCHD really work, what drives their income and what can go wrong, before you put your money in. They are written in plain English, need no finance degree, and are open to everyone.

This page is the starting point for FRC’s complete guide to SCHD. It explains what the fund is, how it chooses its stocks, how it pays you, how it has behaved through good and bad markets, and where to go next for comparisons, income planning, tax and risk. It is part of FRC’s complete step-by-step guide to investing in ETFs.

SCHD in Plain Terms

When you buy a share of SCHD, you are not buying shares in Charles Schwab the company. You are buying a small slice of a fund that itself owns shares in about 100 different US companies. If those companies pay dividends, the fund collects them and passes them on to you.

The fund is run by Schwab Asset Management, part of Charles Schwab, and was launched on 20 October 2011. It trades on the stock exchange like any share, so you can buy or sell it through almost any US brokerage account during market hours.

SCHD is passively managed. Nobody at Schwab picks stocks they like. Instead, the fund copies an index built by S&P Dow Jones Indices, which applies a fixed set of rules to decide which companies get in and how much of each to hold.

That combination of strict rules, low cost and a focus on financially healthy dividend payers is what made SCHD popular. It offers a dividend strategy that does not depend on one fund manager’s judgement.

How SCHD Chooses Its Stocks

The Dow Jones U.S. Dividend 100 Index starts with US companies that have paid a dividend every year for at least ten consecutive years. Real estate investment trusts are excluded. Companies also need a float-adjusted market value of at least $500 million and average daily trading of at least $2 million over three months, so the fund can buy and sell them easily.

The remaining companies are then scored on four measures: cash flow to total debt, return on equity, dividend yield and five-year dividend growth rate. Together, these look for companies that pay a meaningful dividend, have grown it over time, and have the balance sheet and profitability to keep paying it.

The 100 highest-scoring companies make it into the index. Each is weighted by its market value, but no single company can be more than 4% of the index and no single sector more than 25%. Those caps stop the fund from becoming dominated by one company or one industry.

The index is rebuilt once a year, every March, when companies are added and removed based on their latest scores. It is rebalanced back to its caps each quarter. FRC’s dictionary entries on dividends and dividend yield explain the basic terms.

What SCHD Holds

SCHD’s holdings change every March, so the exact list moves over time. In general, it is heavy in consumer staples, healthcare, energy, industrials and established technology companies, and light in the fast-growing technology giants that dominate the S&P 500.

After the March 2026 reconstitution, its largest holdings included household names such as Procter & Gamble, Coca-Cola, PepsiCo, Home Depot, Texas Instruments, Amgen, Abbott Laboratories, Chevron, ConocoPhillips and UnitedHealth Group. Each made up roughly 4% of the fund, close to the cap.

That reconstitution was unusually large. Around a quarter of the companies were replaced, utilities dropped out almost entirely, financial companies returned, and the weight in energy fell while healthcare and technology rose. It showed how much the fund’s make-up can shift in a single year as companies’ scores change.

What SCHD does not hold is just as telling. Companies like Nvidia, Apple, Microsoft, Amazon and Alphabet either pay small dividends or do not meet the index’s yield and dividend growth criteria in the same way, so SCHD has little or no exposure to them.

Don’t pay the market to teach you expensive lessons. ETF Investing for Beginners explains how index funds are built, what you actually own and how to read a fund’s holdings before you invest.

How SCHD Pays Dividends

SCHD pays dividends quarterly, usually in March, June, September and December. Each payment is made to investors who own the fund before its ex-dividend date. FRC’s guide on how ETF dividends work explains ex-dividend, record and payment dates.

The amount changes from quarter to quarter, because it depends on the dividends SCHD’s companies pay in that period. Payments are often lower in some quarters and higher in others, and the total for the year is what most investors watch.

SCHD’s yield has typically sat somewhere around 3% to 4%, roughly two to three times the yield of an S&P 500 fund. In 2026, its quarterly payments were around 26 to 27 cents per share, or a little over $1 per share for the year, so 1,000 shares paid roughly $1,000 to $1,100 in dividends over twelve months.

Over the longer term, SCHD’s dividend has grown substantially since launch, as the companies it holds have raised their own payouts. Its annual dividend has grown at an average of around 9% a year over the past decade, although growth has been noticeably slower in some recent years. SCHD pays quarterly, not monthly.

Most of SCHD’s dividends are qualified dividends, which are taxed at the lower long-term capital gains rates in a taxable account if you meet the holding period. FRC’s guide to how ETFs are taxed in the United States explains the rules.

FRC’s guide to SCHD for passive income looks at how investors use SCHD to build an income stream.

How Much SCHD Do You Need for Income?

The basic calculation is simple: divide the yearly income you want by the fund’s dividend yield. At a yield of about 3%, every $100,000 invested in SCHD produces roughly $3,000 a year in dividends, or about $750 a quarter.

On that basis, $300 a month ($3,600 a year) needs roughly $120,000 invested. $1,000 a month needs roughly $400,000, $5,000 a month roughly $2 million, $50,000 a year roughly $1.7 million and $100,000 a year more than $3.3 million. At around $1.07 per share in annual dividends, $100,000 a year would take more than 90,000 shares.

These figures move every day with SCHD’s price and dividend, so treat them as a guide rather than a promise. A higher yield lowers the amount needed, a lower yield raises it, and a dividend cut would reduce the income. Many investors reach their target gradually, by investing regularly and reinvesting the dividends so the number of shares they own keeps growing.

What SCHD Costs

SCHD’s expense ratio is 0.06% a year, or $6 for every $10,000 invested. That makes it one of the cheapest dividend ETFs available, and much cheaper than most actively managed dividend funds.

Like any ETF, there are other costs too, including the bid-ask spread when you trade and the trading costs inside the fund when its holdings change. SCHD is very heavily traded, so its spreads are tiny. FRC’s guide on how ETF fees affect your investment returns explains the full picture.

The SCHD Stock Split

Many investors searching for SCHD’s price are surprised by how low it looks compared with older charts. That is because SCHD carried out a three-for-one share split in October 2024.

Every investor received three shares for each one they held, and the price per share fell to a third of its previous level. The total value of each investor’s holding did not change, and neither did the fund’s holdings or dividends in total. Only the number of shares and the price per share changed.

Schwab said the split was intended to make shares more accessible to investors. Many brokers now offer fractional shares, but a lower share price still makes it easier to buy whole shares with small amounts. Any price chart that does not adjust for the split will show a sudden two-thirds drop that never happened to investors’ money.

How SCHD Has Performed

SCHD’s returns come from two sources: the dividends it pays and the change in its share price. Together, these make up its total return, which is the figure that matters for comparing it with other funds.

For much of its first decade, SCHD performed strongly, keeping pace with or beating the S&P 500 in several years while paying a much higher dividend. It became known as a fund that could deliver both income and solid growth.

Its defensive character showed in 2022. When the S&P 500 fell by around 18% as interest rates rose, SCHD’s total return was close to flat, losing only a few percent. Its focus on profitable, dividend-paying companies meant it held up far better than growth-heavy funds.

The following years were harder. In 2023 and 2024, when large technology stocks surged, SCHD lagged the S&P 500 by a wide margin, because it holds few of those companies. Periods like these are the trade-off for SCHD’s steadier, value-oriented approach. FRC’s guide to SCHD vs VOO compares the two in detail.

The market doesn’t care whether you understand the risks. It will expose you to them regardless. ETF Investing Strategies shows you how to build an allocation around your goals rather than around whichever fund did best last year.

The Strengths of SCHD

SCHD offers a meaningful dividend from a diversified group of around 100 companies, chosen for financial strength rather than yield alone. That focus on quality has helped it avoid many of the dividend traps that catch funds which simply buy the highest yields.

It is very cheap, very easy to trade and very tax-efficient. Like most ETFs, it rarely distributes capital gains, and most of its income qualifies for lower tax rates.

It also behaves differently from the S&P 500. Because it is heavy in consumer staples, healthcare and energy rather than technology, it can help balance a portfolio that is otherwise dominated by large growth companies.

The Risks of SCHD

SCHD is a stock fund, so it can fall in value, sometimes sharply, in a market crash or recession. Its dividend can also fall if the companies it holds cut their payouts. Neither the share price nor the income is guaranteed.

It is concentrated in certain sectors and very light in technology. When technology stocks lead the market, SCHD can lag for years at a time. Investors who expect it to match the S&P 500 every year are likely to be disappointed.

It is also more concentrated than its 100 holdings suggest. Because each stock can reach 4% of the fund, the ten largest holdings together have often made up around 40% of its value, so a few companies have a big influence on its returns.

Interest rates matter too. Dividend-paying stocks compete with bonds and savings accounts for income investors’ money, so when interest rates rise sharply, funds like SCHD can come under pressure as income seekers find higher yields elsewhere.

Its annual reconstitution can also bring big shifts in holdings, as the 2026 change showed, and can create taxable capital gains distributions in some years. FRC’s guide on why a high ETF dividend yield can be misleading explains why a fund’s yield should never be judged on its own.

Your hard-earned money represents years of work. Give it the respect it deserves. Advanced ETF Investing goes deeper into dividend strategies, sector concentration and building a portfolio that does not depend on one style of investing.

How SCHD Compares With Other Funds

SCHD is most often compared with the S&P 500 and with other dividend ETFs. Each comparison highlights a different trade-off between income, growth and risk.

Against Vanguard’s dividend growth fund, VIG, SCHD offers a higher yield, while VIG holds more companies and leans more towards dividend growth. FRC’s guide to SCHD vs VIG explains the difference, and FRC’s guide to DGRO vs SCHD compares it with iShares’ dividend growth fund.

Against JPMorgan’s income fund, JEPI, SCHD offers lower current income but more potential for growth and dividend increases over time, because JEPI uses an options strategy to boost income. FRC’s guide to JEPI vs SCHD explains how they work.

Against Schwab’s own growth fund, SCHG, SCHD is almost its opposite: income and value against growth and technology. FRC’s guide to SCHD vs SCHG shows how some investors combine them.

Who Uses SCHD and How

Income investors and retirees use SCHD for its quarterly dividends and its focus on financially strong companies. Many reinvest the dividends while working and switch to taking them as income in retirement.

Younger investors often use it as a dividend-focused part of a wider portfolio, alongside a broad market or growth fund. Pairing SCHD with an S&P 500 or Nasdaq fund balances its value tilt with exposure to large technology companies.

Others use it as their main stock fund, valuing its steadier behaviour in downturns. That can work, but it means accepting long periods when it trails the broader market.

How to Buy SCHD

SCHD can be bought through almost any US brokerage account, including Schwab, Fidelity, Vanguard and most trading apps, usually without a commission. Many brokers also let you buy fractional shares, so you can start with a small amount.

It can be held in a taxable brokerage account, an IRA or a Roth IRA. Because its income is mostly qualified dividends, it is relatively tax-friendly in a taxable account, though many investors still prefer to hold income funds in tax-advantaged accounts. FRC’s guide on where to hold ETFs explains the options.

Before buying, it is worth reading the fund’s prospectus and fact sheet, which set out its objective, costs and risks.

Where to Find SCHD’s Official Information

Schwab Asset Management publishes everything investors need to check the fund for themselves. Its SCHD page lists the current price, yield, expense ratio, dividend history and a downloadable fact sheet, along with the full list of holdings, updated regularly.

The fund’s prospectus and statement of additional information set out its objective, risks and costs in detail, and its annual and semi-annual reports show its holdings, expenses and distributions over each period. The index rules themselves are published by S&P Dow Jones Indices.

Checking these primary documents is always better than relying on social media summaries, which often quote out-of-date yields or ignore the risks. FRC’s guide on how to read an ETF prospectus explains what to look for.

Common Misconceptions About SCHD

SCHD is not Schwab stock. Owning it gives you no stake in Charles Schwab the company, only in the roughly 100 companies the fund holds.

A high yield is not the same as a high return. SCHD’s yield is attractive, but its total return depends on its share price too, and in some years that has trailed the wider market.

SCHD is not a savings account. Its price moves every day, its dividends can change, and it can lose value. It is designed for long-term investors who can ride out market falls.

The split did not make SCHD cheaper to own. It changed the price per share, not the value of the fund or what investors own.

Common Questions

What is SCHD? SCHD is the Schwab U.S. Dividend Equity ETF, a fund that owns around 100 established US dividend-paying companies selected for financial strength and dividend growth. It tracks the Dow Jones U.S. Dividend 100 Index.

What index does SCHD track? SCHD tracks the Dow Jones U.S. Dividend 100 Index, which selects 100 US companies with at least ten consecutive years of dividends, ranked on cash flow to debt, return on equity, dividend yield and dividend growth.

How often does SCHD pay dividends? SCHD pays dividends quarterly, usually in March, June, September and December.

What is SCHD’s expense ratio? SCHD’s expense ratio is 0.06% a year, or $6 for every $10,000 invested.

When did SCHD launch? SCHD launched on 20 October 2011.

How many stocks does SCHD hold? SCHD holds around 100 stocks, matching the 100 companies in its index, though the exact number can vary slightly.

Did SCHD split its shares? Yes. SCHD carried out a three-for-one share split in October 2024, which cut the price per share to a third without changing the value of investors’ holdings.

Is SCHD a good investment? SCHD is a low-cost, diversified fund of financially strong dividend payers, and many long-term investors use it for income and stability. It has lagged the S&P 500 in years when technology stocks led, so it suits investors who value income and balance over maximum growth.

Can you lose money in SCHD? Yes. SCHD is a stock fund, so its price can fall, and its dividends can be cut if the companies it holds reduce their payouts.

Does SCHD hold Apple, Microsoft or Nvidia? SCHD holds little or none of the largest technology growth companies, because they pay small dividends relative to their price or do not meet the index’s criteria in the same way.

Who manages SCHD? SCHD is managed by Schwab Asset Management, the asset management arm of Charles Schwab. Its index is run by S&P Dow Jones Indices.

Does SCHD pay monthly dividends? No. SCHD pays quarterly, four times a year, usually in March, June, September and December.

How many times has SCHD split? Once. SCHD’s only share split was a three-for-one split in October 2024.

Why is SCHD’s share price so low? Mainly because of the three-for-one split in 2024, which cut the price per share to a third. A lower share price does not make a fund cheaper or better value; what matters is what it holds and what it costs.

Will SCHD hit $100? Nobody can reliably predict a fund’s future price. After the split, SCHD would need to roughly triple to reach $100, which would depend on the future performance and dividends of the companies it holds.

Has SCHD ever cut its dividend? SCHD’s total annual dividend has risen in almost every year since launch, but individual quarterly payments have sometimes been lower than the same quarter a year earlier. Because it depends on its companies’ payouts, there is no guarantee its dividend will keep rising.

Can SCHD make you a millionaire? It is possible over a long period with large, regular contributions, but no fund guarantees it. As a purely hypothetical illustration, investing $1,000 a month for 30 years at an 8% average annual return would grow to roughly $1.5 million, but actual returns will be different and could be much lower.

Does Warren Buffett own SCHD? No. Berkshire Hathaway invests directly in individual companies rather than dividend ETFs, and Buffett’s best-known recommendation for most investors is a low-cost S&P 500 index fund. SCHD does share some of Buffett’s preferences, including low costs and established, cash-generating companies such as Coca-Cola and Chevron.

Is SCHD only for older investors? No. Retirees like it for income, but younger investors also use it as a dividend-focused part of a wider portfolio. What matters is whether its mix of income, stability and slower growth suits your goals.

Is SCHD safer than VOO? SCHD has often fallen less than the S&P 500 in market sell-offs, as it did in 2022, because it holds fewer high-growth technology stocks. It is still a stock fund, though, and can fall sharply in a crash; it is steadier, not safe.

Your Portfolio Deserves an Educated Investor

SCHD has earned its popularity by offering a simple, low-cost way to own financially strong dividend payers. But it is a stock fund with its own sector tilts, its own quiet years and its own risks, and it works best when investors understand exactly what they own and why.

Imagine knowing exactly what you own, why you own it and what risks you’re taking. FRC’s three progressive ETF programmes take you from how dividend ETFs work, through building an income strategy, to managing concentration and risk across a whole portfolio. 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 SCHD is before you decide what it should do for you.