SCHV: A Defensive Value ETF Offering Strong Dividend Yield and Drawdown Protection

The Schwab U.S. Large-Cap Value ETF (SCHV) offers a 2%+ dividend yield and defensive positioning on drawdowns, making it a strong contender for generating returns in a growth-dominated market. Its value-oriented approach and lower volatility compared to growth-focused ETFs also make it an attractive option for investors seeking stability and income.

The Schwab U.S. Large-Cap Value ETF (SCHV) has emerged as a strong contender for investors seeking stability and income in a growth-dominated market. With a 2%+ dividend yield and a defensive positioning on drawdowns, SCHV offers a compelling investment proposition. This article explores the fund's features, performance, and why it might be an attractive option for investors.

Key Features

The Schwab U.S. Large-Cap Value ETF (SCHV) is a passively managed exchange-traded fund (ETF) launched on December 11, 2009, with a focus on the large-cap value segment of the US equity market. Sponsored by Charles Schwab, the fund has amassed assets of over $12.91 billion, positioning it as one of the larger ETFs in this space [1].

Value-Oriented Approach

Companies in the large-cap value category typically have a market capitalization above $10 billion. These companies are known for their stability, lower risk, and more predictable cash flows compared to mid and small cap companies. Value stocks, characterized by lower price-to-earnings and price-to-book ratios, and lower sales and earnings growth rates, have historically outperformed growth stocks in most markets over the long term [1].

Cost Efficiency

Cost is a crucial factor when selecting an ETF. The Schwab U.S. Large-Cap Value ETF (SCHV) stands out with an annual operating expense ratio of 0.04%, making it one of the most cost-effective options in the space. Additionally, the ETF offers a 12-month trailing dividend yield of 2.12% [1].

Sector Exposure and Top Holdings

The fund has a significant allocation to the Financials sector, accounting for about 23% of the portfolio. Industrials and Healthcare round out the top three sectors. Berkshire Hathaway Inc Class B (BRK/B), JPMorgan Chase (JPM), and Exxon Mobil Corp (XOM) are among the top holdings, with the top 10 holdings accounting for approximately 18.85% of total assets under management [1].

Performance and Risk

SCHV aims to match the performance of the Dow Jones U.S. Large-Cap Value Total Stock Market Index before fees and expenses. As of July 2025, the ETF has returned approximately 9.12% year-to-date and 12.74% over the past year, with a 52-week trading range of $23.55 to $28.20 [1]. The fund has a beta of 0.88 and a standard deviation of 14.55% over the trailing three-year period, indicating a medium risk profile [1].

Alternatives and Conclusion

While Schwab U.S. Large-Cap Value ETF (SCHV) is a strong option, investors should consider other ETFs such as the Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV), which also track similar indices. SCHD has an expense ratio of 0.06%, while VTV charges 0.04% [1].

In summary, the Schwab U.S. Large-Cap Value ETF (SCHV) offers a value-oriented approach with lower volatility and a 2%+ dividend yield, making it an attractive option for investors seeking stability and income in a growth-dominated market. Its cost efficiency and strong performance make it a compelling choice for long-term investors.

References
[1] https://finviz.com/news/111808/should-schwab-us-large-cap-value-etf-schv-be-on-your-investing-radar
[2] https://finance.yahoo.com/quote/SCHV/