Top-Performing Dividend ETF for Long-Term Investment Over the Next Decade
In the world of investment, finding a reliable source of steady returns is essential for any investor. One such option that has been garnering attention is the Schwab U.S. Dividend Equity ETF (SCHD). This ETF, with a focus on U.S. large-cap dividend-paying companies, offers a unique blend of stability and growth potential.
The SCHD's top 10 holdings, as of August 2025, include Chevron Corp (CVX), PepsiCo Inc, ConocoPhillips, Altria Group Inc, AbbVie Inc, Cisco Systems Inc, The Home Depot Inc, Merck & Co Inc, Texas Instruments Inc, and Verizon Communications Inc. These top 10 holdings collectively represent approximately 41.29% of the fund's total assets.
The criteria for inclusion in the SCHD are rigorous, requiring at least 10 years of dividend payouts, a history of annual dividend increases, a strong balance sheet, and consistent cash flow. This vetting process is crucial when investing long-term and planning to hold onto the stock for at least a decade, as advised by the legendary investor Warren Buffett.
Over the past decade, the SCHD has maintained an average dividend yield of at least 3%, higher than the S&P 500 during the same period. This means that an investor could earn at least $30 per $1,000 invested annually.
The SCHD's low expense ratio of 0.06% allows investors to keep more money for themselves, with $0.60 per $1,000 invested in fees. Over a decade, a small difference in expense ratios can lead to thousands of dollars in fees. For example, a 0.06% expense ratio versus a 0.25% expense ratio could result in $2,777 in additional fees over a decade.
The SCHD mirrors the Dow Jones U.S. Dividend 100 Index, providing an above-average dividend yield compared to the S&P 500 while minimizing risks associated with individual stocks. Payouts from the SCHD (and most dividend ETFs) fluctuate due to companies paying out dividends at different times, but this volatility is offset by the compound effect of long-term holding.
Investing in a dividend-focused ETF like the SCHD can be a good way to get good payouts and relative stability. Most of the value in dividend stocks typically comes from holding them long term and taking advantage of the compound effect. The SCHD's dividends can provide a way to earn money in the stock market without relying solely on a stock or ETF's price appreciation.
The SCHD is one of the more popular dividend ETFs on the stock market, offering a balanced approach to investing in dividend-paying companies. With its rigorous criteria for inclusion, top holdings, and low expense ratio, the Schwab U.S. Dividend Equity ETF is a strong choice for investors seeking stable, long-term returns.
[1] Data source: Schwab U.S. Dividend Equity ETF Fact Sheet (August 2025) [2] Multiple sources, including Yahoo Finance and Morningstar, indicate slightly varying figures around 4% each for Cisco, Home Depot, Merck, and Texas Instruments. [3] SEC compound interest calculator was used to calculate the potential savings from the Schwab U.S. Dividend Equity ETF's low expense ratio. [4] Data source: Dow Jones U.S. Dividend 100 Index composition (August 2025) [5] Multiple sources, including Yahoo Finance and Morningstar, were used to verify the top 10 holdings and their respective percentages.
- For those seeking a reliable source of steady returns in the investment world, the Schwab U.S. Dividend Equity ETF (SCHD) is an option that attracts attention, offering a mix of stability and growth potential.
- The SCHD's top 10 holdings, as of August 2025, include tech giants like Cisco Systems Inc and technological companies such as Texas Instruments Inc, showcasing the ETF's diversification across different sectors.
- Smartphone users might recognize names like Verizon Communications Inc that falls within SCHD's portfolio, indicating the fund's inclusivity of companies from various industries.
- Personal-finance enthusiasts looking for wise investment advice can often find it from the legendary investor Warren Buffett, who advocates for long-term investments and the SCHD's rigorous criteria for inclusion aligns with this strategy.
