April 15, 2016

A Portfolio of High-Quality Dividend-Paying Stocks at a Rock-Bottom Price

Schwab U.S. Dividend Equity ETF is a solid core holding with an income orientation.

Schwab U.S. Dividend Equity (SCHD) is a passively managed exchange-traded fund that homes in on high-quality income-producing stocks. The fund's index is composed of large, liquid companies that have paid dividends in each of the past 10 years, and it requires constituents to earn high marks on four fundamental metrics: cash flow/debt, return on equity, dividend yield, and dividend growth. The resulting portfolio is one of the highest-quality among all large-cap dividend-oriented ETFs. Also, SCHD charges a 0.07% expense ratio, which makes it the least expensive dividend-oriented ETF available. This fund's high-quality portfolio and low cost make it a suitable core equity holding.

The fund can also be used in a more targeted fashion as a source of equity income... 

Source: Morningstar