Like some other major dividend exchange traded funds, the The Schwab US Dividend Equity ETF (NYSEArca: SCHD) has traded lower this year, losing 2.4% as investors have fretted about the impact of rising interest rates on dividend stocks.
But with equity markets rebounding in October, there are reasons to believe SCHD could resume delivering upside for investors. SCHD tracks the Dow Jones U.S. Dividend 100 Index, which not only features some of the largest U.S. dividend payers, but also only those companies with at least 10 years of increased payouts, a familiar trait among some dividend funds. [Quality Lifts This Dividend ETF]
SCHD makes good on the promise of low fees. With its expense ratio of 0.07% per year, SCHD is the least expensive dividend ETF on the market today. Schwab clients can realize additional cost savings because SCHD, like all other Schwab ETF’s, is available commission-free on the firm’s ETF OneSource platform.
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.
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.