Schwab’s deep distribution network among registered investment advisors and the company’s loyal following among self-directed retail investors have helped buoy SCHD’s growth, but the ETF is gaining traction beyond the Schwab platform.
“We’re seeing growth outside the platform,” said Sturiale. “Investors like the decent yield and lowest fees in category, so we’re seeing more people outside the Schwab network buy SCHD.”
Speaking of fees, SCHD charges just 0.07%, even less than the Vanguard Dividend Appreciation ETF (NYSEArca: VIG). However, it is not the annual fee that acts as a cost saver for investors. Schwab clients can trade SCHD commission-free and the ETF’s robust liquidity leads to a tight bid/ask spread that further reduces total cost of ownership.
SCHD’s underlying index screens for companies with average daily dollar volume of at least $2 million, which further enhances liquidity while keeping spreads tight, according to Sturiale.
Schwab US Dividend Equity ETF
Tom Lydon’s clients own shares of SCHD.