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Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Schwab U.S. Dividend Equity ETF (SCHD) is a passively managed exchange traded fund launched on 10/20/2011.
The fund is sponsored by Charles Schwab. It has amassed assets over $63.21 billion, making it the largest ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.06%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 4.17%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Healthcare sector--about 18.10% of the portfolio. Financials and Consumer Staples round out the top three.
Looking at individual holdings, Abbvie Inc (ABBV) accounts for about 4.87% of total assets, followed by Coca-Cola (KO) and Amgen Inc (AMGN).
The top 10 holdings account for about 43.22% of total assets under management.
Performance and Risk
SCHD seeks to match the performance of the Dow Jones U.S. Dividend 100 Index before fees and expenses. The Dow Jones U.S. Dividend 100 Index is designed to measure the performance of high dividend yielding stocks issued by U.S. companies that have a record of consistently paying dividends, selected for fundamental strength relative to their peers, based on financial ratios.
The ETF has lost about -7.80% so far this year and is down about -1.36% in the last one year (as of 04/08/2025). In the past 52-week period, it has traded between $24.94 and $29.53.