Income-minded investors have also typically gravitated toward these high quality companies as firms that regularly raise dividends also tend to be confident about their ability to continue paying the dividends as the dividend increases are also calculated in line with future growth.

“While most dividend-focused funds employ either a dividend-growth strategy or a focus on yield, this offering falls between the two camps. It focuses on durable, high-quality companies with dividend yields, but it doesn’t reach into distressed, deep-value territory,” said Morningstar of SCHD in a recent note.

Last week, investors added $2.33 billion in new assets to SCHD, a total surpassed by just two other ETFs. Year-to-date, SCHD has seen inflows of $2.72 billion, good for seventh-best among all US-listed ETFs.

SCHD charges just 0.07% per year, or $7 on a $10,000 investment, making it one of the least expensive dividend ETFs. Schwab clients can realize additional cost savings on SCHD by using the firm’s ETF OneSource commission-free platform.

For more on smart beta ETFs, visit our Smart Beta Channel.

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