Schwab U.S. Dividend Equity ETF: A Safe Haven for Retirees?

The Schwab U.S. Dividend Equity ETF is a popular choice among retirees for its stable dividend yield and reduced volatility. With a low expense ratio of 0.06% and net assets of $68 billion, the ETF tracks the Dow Jones U.S. Dividend 100 Index and holds 100 stocks. The top three holdings are Texas Instruments, Chevron, and ConocoPhillips, and the ETF pays a dividend yield of 4.0%. It has a solid track record of generating positive returns and may be a good bet for conservative investors and retirees.

The Schwab U.S. Dividend Equity ETF (SCHD) has emerged as a preferred investment option for retirees seeking stable dividend income and reduced volatility. With a low expense ratio of 0.06% and net assets of $68 billion, this ETF tracks the Dow Jones U.S. Dividend 100 Index, which includes 100 blue-chip stocks known for their strong dividend history and financial stability.

Key Features of SCHD

- Dividend Yield: As of June 2025, the ETF offers a dividend yield of 4.0%, making it an attractive option for income seekers.
- Expense Ratio: The 0.06% expense ratio is competitive and helps to minimize the costs associated with investing.
- Top Holdings: The ETF's top three holdings are Texas Instruments, Chevron, and ConocoPhillips, which are well-known for their financial strength and dividend consistency.

Benefits for Retirees

SCHD is particularly appealing to conservative investors and retirees due to several reasons:

- Stable Dividend Income: The ETF's focus on companies with a history of consistent dividend payments ensures a steady income stream, which is crucial for retirees relying on dividends to supplement their retirement income.
- Reduced Volatility: Compared to other dividend-focused ETFs, SCHD exhibits lower volatility, making it a safer choice for investors who prioritize capital preservation.
- Solid Track Record: The ETF has a proven track record of generating positive returns over various market cycles, providing investors with confidence in its performance.

Why Consider SCHD?

For retirees or investors seeking immediate income and willing to accept slightly higher volatility for a higher yield, SCHD could be an excellent choice. Its sector diversification, which avoids rate-sensitive utilities and REITs, further limits downside risks, making it a robust option for conservative investors.

Conclusion

The Schwab U.S. Dividend Equity ETF (SCHD) is a well-rounded investment option for retirees looking for stable dividend income and reduced volatility. With its low expense ratio, strong dividend yield, and solid track record, SCHD is a reliable choice for conservative investors seeking to generate income from their investments.

References

[1] https://www.ainvest.com/news/dividend-etfs-horizons-vig-schd-portfolio-2507/
[2] https://www.fool.com/investing/2025/07/07/should-you-buy-the-3-highest-paying-dividend-stock/