Investor Picks Schwab SCHD as First Portfolio Holding, Citing 12% Annualized Returns
Updated
Updated · The Motley Fool · Jul 26
Investor Picks Schwab SCHD as First Portfolio Holding, Citing 12% Annualized Returns
2 articles · Updated · The Motley Fool · Jul 26
Summary
SCHD is presented as a starter portfolio anchor because it combines dividend income with long-term growth rather than chasing either high yield or pure growth alone.
Hartford Funds data underpins that case: S&P 500 dividend growers and initiators returned 10.22% annually with lower volatility, versus 4.21% for non-payers and -0.96% for dividend cutters.
The ETF tracks the Dow Jones U.S. Dividend 100 Index, holding 100 high-yielding U.S. stocks screened for yield, five-year dividend growth and financial strength.
SCHD’s payout has risen steadily since 2011, with distributions compounding at 11.2% annually since 2017; its current holdings have lifted dividends at a 9.4% five-year rate.
That dividend-growth tilt has translated into performance, with SCHD delivering more than 12% annualized returns over one-, three- and 10-year periods and 13.1% since inception.