Is SCHD a Good Investment In Today's Market

Is SCHD a Good Investment In Today’s Market

If you want a low-cost way to own established U.S. companies that pay and grow dividends, the Schwab U.S. Dividend Equity ETF (SCHD) is built for that job. It tracks the Dow Jones U.S. Dividend 100 Index, charges a 0.06% expense ratio, and held ~100 stocks with ~US$69B in assets as of 31 Oct 2025. The latest 30-day SEC yield is 3.92% (as of 30 Oct 2025). This article examines is SCHD a good investment by breaking down what SCHD owns, how the dividend is generated, how it has performed across market cycles, the key trade offs to consider, and practical ways to position it in a balanced portfolio.

What You Actually Own With SCHD

SCHD does not chase the highest yields. Its index first requires a multi-year dividend history, then ranks candidates on fundamentals such as return on equity, cash-flow to debt, five-year dividend growth, and forward yield. Names are added or removed once a year and the fund rebalances each quarter, which keeps the portfolio aligned with the rules and helps avoid classic yield traps. In practice, this means you hold around one hundred large and mid-cap US businesses with the balance-sheet strength to keep paying and growing dividends through cycles.

If you are asking is SCHD a good investment, this disciplined screen is a central reason many investors say yes.

SCHD Facts

• Expense ratio 0.06%
• Quarterly distributions with a trailing yield typically in the high 3s, subject to market moves
• Inception 2011 with deep liquidity
• 3-for-1 share split in October 2024, cosmetic only

Performance in Context

Over the long run since launch, SCHD has delivered double-digit annualised returns, which is solid for an income-tilted strategy. More recently, markets have been led by a narrow group of mega-cap growth names, so dividend and value styles have lagged the S&P 500. That is a style cycle rather than a strategy failure. Leadership rotates. When you evaluate is SCHD a good investment today, remember that value and dividends often re rate after long growth led runs.

Where SCHD Fits

Great fit: an income sleeve focused on quality U.S. dividend payers at very low cost, with straightforward quarterly cash flows you can reinvest or spend.
Not a one-ticket market proxy: because it screens for dividends and quality, it will be structurally underweight the narrow group of hyper-growth leaders during certain rallies, pairing with a broad market or growth fund keeps style risk in check.

Strengths and Weaknesses of SCHD

Strengths You Can Count On

• Quality-first dividend screen (sustainability over headline yield).
• Low fee & deep scale (0.06% TER; tight trading).
• Transparent rules (annual reconstitution, quarterly rebalance).

Trade-offs to Understand

• Style and sector tilts: tends to lean value/defensive; can underperform when growth is narrowly leading.
• Dividends are not guaranteed: payout policies can change with business conditions.

Monthly Dividend Alternatives: DIVO and DGRW

A recent comparison argued that investors who want monthly cash flow or stronger long-term total return in growth-friendly markets can also look at DIVO and DGRW. They are not replacements for every investor, but they are useful complements depending on your goal.

Amplify CWP Enhanced Dividend Income (DIVO)

• What it does: holds ~20–30 blue-chip dividend stocks and sells selective covered calls on some positions, adding option income while trying to preserve upside in faster growers. Pays monthly; expense ratio 0.56%.
• Why investors look at it: a higher distribution rate than SCHD and a strategy that can cushion volatility; in tech-led 2025, DIVO’s total return outpaced many income peers.
• Key trade-off: covered calls can cap upside during strong rallies, and the fee is much higher than SCHD’s.

WisdomTree U.S. Quality Dividend Growth (DGRW)

• What it does: tracks quality dividend growth (think ROE/earnings quality with moderate payout ratios) and tilts more toward quality-growth than plain value. Monthly distributions; expense ratio 0.28%.
• Why investors look at it: historically higher total return than many dividend-value funds during growth-friendly markets, thanks to heavier tech/quality exposure. (WisdomTree’s 10-yr figures through Sep 2025 show DGRW around the mid-teens annualised.)
• Key trade-off: lower current yield than SCHD; you’re owning it for quality-growth + dividend growth rather than maximum cash yield.

Monthly payers can help smooth cash flow and accelerate compounding for DRIP users, but strategy details matter. DIVO’s option income boosts cash yield but may limit upside; DGRW tilts growth-ward, boosting total return potential but reducing yield versus SCHD. Pick the tool that matches your goal (income now vs. total return with dividend growth).

How SCHD Compares With Popular Dividend ETFs

To see where SCHD truly fits, we line it up against popular dividend funds on fees, income profile, quality screens, and long-term results.

• Vanguard High Dividend Yield (VYM): similar 0.06% fee, broader high-yield universe, lighter quality overlay than SCHD.
• iShares Core Dividend Growth (DGRO): 0.08% fee, focuses on dividend growth. Often a complementary sleeve to SCHD.
• SPDR Portfolio S&P 500 High Dividend (SPYD): 0.07% fee, equal-weights 80 high-yield S&P names; usually a higher headline yield with more cyclical risk.

How To Position Your Portfolio With SCHD

Use these guidelines to place SCHD as an income anchor and pair it with complementary funds based on your goals for cash flow and growth.

• Income anchor: use SCHD as your dividend core; pair with a broad market/growth ETF (or with DGRW) to balance style exposure.
• Income maximiser: if your priority is monthly cash, consider a SCHD+DIVO blend
• DRIP & DCA: monthly or quarterly reinvestment compounds regardless of payout schedule; frequency is secondary to total return and costs over time.

Conclusion

Is SCHD a good investment? For many long-term investors, yes if you want a quality-screened dividend sleeve with a rock-bottom fee and can tolerate periods when growth dominates.

If you prefer monthly cash flow or a growth-tilted dividend profile, DIVO and DGRW are credible complements or alternatives, each with distinct trade-offs on yield, fees, and upside capture. Build the mix that matches your income needs, tax situation, and risk tolerance.