SCHD tracks 100 U.S. stocks picked for dividends and financial strength
Staples, health care and energy are more than half the fund, which led Morningstar's Large Value category through September and trailed it over three and five years.
Key takeaways
Schwab U.S. Dividend Equity ETF, SCHD, has tracked the Dow Jones U.S. Dividend 100 Index since Oct. 20, 2011. The summary prospectus dated Feb. 27, 2026 says the goal is "to track as closely as possible, before fees and expenses, the total return" of that index.
The prospectus describes a 100-stock index 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."
It held $118.7 billion as of Oct. 23, and the annual fee is 0.06%. etf.net ranks it second of 53 funds in its US Dividend Index category, with an A.
A screen with two caps
The prospectus says a stock needs 10 consecutive years of dividend payments to get in. From the highest-yielding names that qualify, the index selects on four measures: cash flow to total debt, return on equity, dividend yield and five-year dividend growth.
The prospectus caps any one stock at 4% of the index and any sector at 25%, and says the list is reviewed once a year and rebalanced every quarter.
The prospectus says that under normal circumstances the fund invests at least 90% of its net assets in those stocks.
More than half in three sectors
On Oct. 23, Schwab's holdings were led by Texas Instruments, Chevron, ConocoPhillips, Procter & Gamble and Coca-Cola.
The 10 largest holdings all sit near 4%
As of Sept. 30, consumer staples were 20.0% of the fund, health care 19.2% and energy 15.4%. Together they are more than half. Information technology was 12.2%.
The Oct. 23 holdings do not include Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta or Tesla.
What the fund has paid
The fund has paid quarterly since 2011. Schwab's distribution yield was 3.24% as of Sept. 30, the past year's dividends divided by the value of a share that day.
The last four payments came to $1.0541 a share, the cash behind that yield, 1.95% above the $1.0339 paid over the prior four quarters.
Ahead through September, behind over three and five years
Through Sept. 30, Schwab reports a total return of 21.51% on the shares. The value of the holdings returned 21.46%, against 12.01% for Morningstar's Large Value category, a lead of 9.45 percentage points. On Schwab's fund page, the index returned 21.57% for that date.
Over the three years through that date, the value of the holdings returned 15.44% a year, against 17.37% for Morningstar's Large Value category, and over five years 9.48% a year, against 10.84%. Over 10 years it led, 12.44% a year to 11.14%.
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