Schwab U.S. Dividend Equity ETF Recommended for New Portfolios

The Charles Schwab Corporation manages the Schwab U.S. Dividend Equity ETF (SCHD), which is currently recommended as a foundational investment for portfolios starting from scratch. The fund tracks the Dow Jones U.S. Dividend 100 Index, utilizing a selection process based on financial strength, yield, and five-year dividend growth rates to identify 100 high-quality stocks.

Since its launch in 2011, the ETF has achieved an average annualized total return of 13.1%. Further performance data indicates that the fund has grown its payouts at an 11.2% compound annual rate since 2017.

This investment recommendation is backed by data from Hartford Funds and Ned Davis Research. Their findings show that companies that initiate or grow dividends typically provide higher returns and lower volatility than companies that do not pay dividends or those with stagnant or declining dividend policies.