Is the Schwab U.S. Dividend Equity ETF a Millionaire Maker?

As an investor, you're always on the lookout for the next big thing. The next stock, ETF, or strategy that will make you a millionaire. But what if the answer has been right under your nose all along? Enter the Schwab U.S. Dividend Equity ETF (SCHD). This ETF, launched in 2011, has been quietly making millionaires for over a decade. But is it the right choice for you? Let's dive in and find out.

First, let's talk about performance. SCHD tracks the Dow Jones U.S. Dividend 100™ Index, which consists of 100 U.S. companies with a history of consistent dividend payments and growth. This focus on dividend growth has led to impressive returns. As of 09/30/2024, SCHD's 10-year annualized return was 13.38%, compared to the S&P 500's 11.71% over the same period. But it's not just about the past. SCHD's 3-year average annualized return was 8.21%, indicating strong performance even in more recent years.

Now, let's talk about dividends. SCHD's 3-year average annualized dividend yield was 2.74% as of 09/30/2024. While this may not seem like much, remember that dividends can be reinvested, compounding your returns over time. Plus, SCHD's focus on dividend growth means that those yields are likely to increase over time.

But what about risk? SCHD's maximum drawdown during the 2019-2020 market downturn was 21.55%, which is less severe than the S&P 500's maximum drawdown of 33.97% during the same period. This suggests that SCHD may offer some level of protection during market downturns due to its focus on large-cap value stocks with strong fundamentals and consistent dividend payments.



So, is SCHD a millionaire maker? It's important to note that no investment can guarantee you'll become a millionaire. However, SCHD's track record of strong performance, consistent dividend growth, and lower risk compared to the broader market makes it a compelling choice for long-term investors. Plus, with an expense ratio of just 0.06%, SCHD is incredibly affordable.

But don't just take my word for it. Consider the words of Warren Buffett, who once said, "Someone's sitting in the shade today because someone planted a tree a long time ago." SCHD is that tree. It may not grow as fast as some other investments, but it's a solid, reliable choice that can provide you with a steady stream of income for years to come.

So, if you're looking for a way to grow your wealth over the long term, consider the Schwab U.S. Dividend Equity ETF. It may not be the flashiest or most exciting investment out there, but it's a proven performer that can help you build a solid financial future. And who knows? You might just become a millionaire along the way.