Latest news with #SchwabUSDividendEquityETF
Yahoo
26-05-2025
- Business
- Yahoo
If You Buy the Schwab U.S. Dividend Equity ETF, You Might Want to Add This Dividend ETF Too
The Schwab U.S. Dividend Equity ETF is a well-structured dividend option. By design, the Schwab U.S. Dividend Equity ETF is going to underweight in certain sectors known for paying large dividends. Income investors looking to have a broadly diversified dividend portfolio should consider pairing the Schwab U.S. Dividend Equity ETF with another dividend-focused ETF. 10 stocks we like better than Schwab U.S. Dividend Equity ETF › The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is offering an attractive dividend yield today of around 4% or so. It is also very well-designed, mixing income, company quality, and growth into one exchange-traded fund (ETF) option. But it misses out on some key dividend-focused sectors, which is why you might want to add this one simple dividend ETF to your portfolio if you own the Schwab U.S. Dividend Equity ETF. Getting right into the meat of it, the Schwab U.S. Dividend Equity ETF only looks at companies that have increased their dividends for at least a decade. It then eliminates real estate investment trusts (REITs) from the list. For all the stocks that remain, it creates a composite score looking at cash flow to total debt, return on equity, dividend yield, and a company's five-year dividend growth rate. The 100 companies with the highest composite scores are included in the Schwab U.S. Dividend Equity ETF. The stocks are market cap-weighted, so the largest companies have the greatest impact on performance. Every year, the list is updated and the portfolio rebalanced. The cost for all of this is a very modest 0.06% expense ratio. Effectively, the Schwab U.S. Dividend Equity ETF is buying well-run companies that have attractive yields and proven track records of growth. It is likely buying many of the same companies that a dividend investor would be looking at if they invested in individual stocks. It's a solid core holding. Although the Schwab U.S. Dividend Equity ETF's approach is good, it isn't perfect. (No investment is perfect -- they all come with trade-offs.) For example, REITs are excluded from consideration, even though they are designed to pass income on to investors in a tax-advantaged manner (REITs avoid corporate-level taxes if they distribute at least 90% of taxable earnings as dividends). The screening process for the Schwab U.S. Dividend Equity ETF, meanwhile, will generally leave it underweight in areas like utilities and finance; sectors that are also known for paying dividends. And turnaround stocks, which often have high yields, will likely fail the screens, too. So buying the Schwab U.S. Dividend Equity ETF is a good idea, but you might want to consider pairing it with another dividend-focused ETF if you want a widely diversified dividend portfolio. A strong candidate is SPDR Portfolio S&P 500 High Dividend ETF (NYSEMKT: SPYD). By comparison, it is an incredibly simple ETF. It basically buys the 80 highest-yielding stocks in the S&P 500 (SNPINDEX: ^GSPC). That's it. But that's actually a near-perfect compliment for the Schwab U.S. Dividend Equity ETF, though its expense ratio is a touch higher at 0.07%. The highest-yielding stocks in the S&P 500 are generally focused on the REIT, utility, and finance sectors (with a smattering of turnaround stories thrown in). That's where the SPDR Portfolio S&P 500 High Dividend ETF has some of its largest allocations. There's a bit of an overlap in the consumer staples niche between the two ETFs, but that's probably not a bad thing, given that this sector tends to be fairly resilient during economic downturns. All in, with these two ETFs, you get exposure to the most important dividend sectors and some of the strongest-performing dividend-paying companies. The SPDR Portfolio S&P 500 High Dividend ETF's dividend yield is slightly higher, at 4.5%, too, so its inclusion in your portfolio will also help you generate a little more income. The truth is, this story could go the other way, too. If you buy either one of these ETFs, you are missing out on an important dividend approach. The Schwab U.S. Dividend Equity ETF highlights dividend growth and high-quality companies. The SPDR Portfolio S&P 500 High Dividend ETF's approach is focused simply on high-yield stocks, though that's within the confines of the S&P 500's selection criteria. The differences between the two ETFs is a little subtle, but in the end, they work well together to create a balanced income portfolio. Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. If You Buy the Schwab U.S. Dividend Equity ETF, You Might Want to Add This Dividend ETF Too was originally published by The Motley Fool
Yahoo
21-05-2025
- Business
- Yahoo
Is the Vanguard S&P 500 Index ETF Right for Your Retirement Portfolio? 3 Better ETFs for Dividend Investors
The Vanguard S&P 500 Index ETF is a great choice for building wealth. But some investors, particularly retirees, may have different goals. They may want to look at these three dividend-focused ETFs instead. 10 stocks we like better than Schwab U.S. Dividend Equity ETF › Buying the S&P 500 index is a great wealth-building investment. One of the lowest-cost ways to do that today is with the Vanguard S&P 500 Index ETF, which has a tiny 0.03% expense ratio. But is this exchange-traded fund (ETF) the best option for all investors? Maybe not, particularly if you are retired and looking to live off of the income your portfolio generates. Here are three better choices for income-focused investors to consider. Before getting to the alternatives to the S&P 500 index, this broad-based market index needs to be given its due. As the chart below highlights, a $150,000 investment in Vanguard S&P 500 Index ETF at its founding in late 2010 would be worth over $500,000 today. It has been a powerful growth tool, and that's just the last 15 years or so. If you go back to the first S&P 500 index ETF to be put out -- the SPDR S&P 500 ETF, which was created in early 1993 -- getting to $1 million would have only required an investment at its launch of around $45,000. (The SPDR S&P 500 ETF's expense ratio is 0.09%, so it isn't as cost effective an investment as the Vanguard S&P 500 Index ETF today.) Both of the graphs here are showing total return, which assumes dividends are reinvested. This is basically how an investor looking to build wealth would look at investing. The problem is that not all investors are looking for big total returns. Some, particularly those who have reached retirement, are looking for income. Or, at the very least, a mix of income and capital growth. The goal for someone in retirement has likely shifted from building wealth to living off of the nest egg that they have created. If that's the stage of life you are in, you might want to consider buying the Schwab US Dividend Equity ETF (NYSEMKT: SCHD), SPDR Portfolio S&P 500 High Dividend ETF (NYSEMKT: SPYD), or Vanguard High Dividend ETF (NYSEMKT: VYM). Here's why. Shifting from a capital appreciation approach to one focused on generating passive income is probably easier today than at any time in Wall Street history thanks to exchange-traded funds. The problem is going to be figuring out which ETF will best fit your personal investment goals. For example, the Schwab US Dividend Equity ETF attempts to find a balance between high-quality growing companies and yield. It does this by starting the selection process with companies that have at least 10 annual dividend increases. It then creates a composite score that includes cash flow to total return, return on equity, dividend yield, and five-year dividend growth rate. The 100 stocks with the highest composite score get into the portfolio and are weighted by market capitalization. The yield is currently around 4% for this ETF, which basically does exactly what you would do (buying well-run companies with attractive yields) if you were trying to build a dividend stock portfolio from the ground up. If you wanted a bit more yield than that, you might consider the SPDR Portfolio S&P 500 High Dividend ETF. It is a very simple ETF to understand because all it does is buy the 80 highest yielding stocks in the S&P 500 index. The yield is around 4.5% today. The one caveat here is that the SPDR Portfolio S&P 500 High Dividend ETF will usually have a heavy concentration in utility, real estate, and finance stocks because these are sectors that traditionally have high yields. It may also contain some out of favor and turnaround situations. So far, the portfolios have been getting smaller and more focused. But if you like the idea of owning a large number of stocks for diversification purposes, then you might consider the Vanguard High Dividend ETF. It takes the entire U.S. investing universe of stocks that pay dividends. It then, roughly speaking, buys the highest yielding 50% of the list. There are two important outcomes from this broad approach. First, the ETF owns over 550 companies. Second, because there are so many companies it has to move down the yield spectrum and has "just" a 3% or so yield. That is, of course, more than twice the 1.3% yield of the S&P 500 index, but it is also lower than the other two ETFs noted above. In the end, there is no single investment that will be perfect for all investors. You have to consider your own personal situation and then attempt to find the investment that you believe will be the best fit. If you are building wealth, an S&P 500 index will be a great starting point. But if you are trying to live off of the wealth you have built, then you might want to consider dividend focused ETFs like the Schwab US Dividend Equity ETF, SPDR Portfolio S&P 500 High Dividend ETF, or Vanguard High Dividend ETF. The Schwab US Dividend Equity ETF is probably a solid middle-ground choice touching on both income and growth. But there are good reasons why you might want to pick the SPDR Portfolio S&P 500 High Dividend ETF or Vanguard High Dividend ETF, instead. Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor's total average return is 975% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF and Vanguard Whitehall Funds-Vanguard High Dividend Yield ETF. The Motley Fool has a disclosure policy. Is the Vanguard S&P 500 Index ETF Right for Your Retirement Portfolio? 3 Better ETFs for Dividend Investors was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
02-05-2025
- Business
- CNBC
These are Morningstar's top-rated dividend ETFs in 2025
Investors seeking income have several high-quality options in dividend-paying exchange-traded funds, according to Morningstar. People often turn to dividend stocks during times of volatility, thanks to their defensive nature. While the market has had a tumultuous month since President Donald Trump announced his sweeping new tariff policy, stocks have lately been moving higher . On Friday, the S & P 500 was on track for its ninth consecutive day of gains, its longest winning streak since November 2004. Still, good dividend ETFs can work in all market environments, said Ryan Jackson, senior analyst for passive strategies at Morningstar. "The ability to … stay competitive during rallies, but hold up better during drawdowns, I think is something that a lot of investors find attractive, especially when you mix in the income that they're throwing off," he said. The financial services firm recently compiled a list of its-top rated dividend ETFs in 2025. They all earned medalist ratings of gold or silver and offer trailing yields higher than the market, as of April 28. Here are some that made the cut. The list includes various strategies. There are dividend-income funds, dividend-growth funds and combinations of the two, Jackson pointed out. The first holds companies that prioritize the yield. Those have the potential to be a little riskier if the businesses aren't necessarily healthy but continue to pay income, he noted. Dividend-growth funds focus on companies that aim to grow their dividends year after year. Those tend to be businesses that are profitable and growing, he said. "The one thing that unites them, despite their different styles, is the fact that, yes, they are targeting dividends and targeting yield, but they have — whether it's explicit or implicit — some sort of quality component to make sure you're not dipping into really high-risk companies, because that's the big concern with dividend and yield strategies," Jackson said. For instance, the Vanguard Dividend Appreciation ETF tracks dividend growers that have increased payouts for at least 10 consecutive years. It has a gold medalist and three-star rating from Morningstar. The fund has a 1.73% 30-day SEC yield and 0.05% expense ratio. "You're making the trade off there — perhaps a little bit less yield, but higher upside and a more favorable outlook," Jackson said. VIG 1Y mountain Vanguard Dividend Appreciation ETF one-year performance The ETF is down more than 2% year to date. The Fidelity High Dividend ETF is rated silver and boasts five stars from Morningstar. It has a 30-day SEC yield of 3.22% and an expense ratio of 0.16%. The ETF is a little more value oriented, perhaps at the expense of some capital appreciation, Jackson noted. Still, while the Fidelity High Dividend ETF focuses on yield, it incorporates payout ratio and dividend growth — both signs of financial health — into stock selection. The fund has lost nearly 3% so far this year. The Schwab US Dividend Equity ETF is another Morningstar gold medalist. It is rated four stars by the fund researcher, has a 3.94% 30-day SEC yield and a 0.06% expense ratio. "It's an excellent fund," Jackson said. "This is a good example of something that is balancing yield and quality." SCHD 1Y mountain Schwab US Dividend Equity ETF one-year performance The managers screen for dividend-paying stocks that clear a certain threshold in yield, but then also measure them by their free-cash-flow-to-debt ratio, dividend growth and return on equity, Jackson said. Those that score well in those categories tend to be healthy, high-quality stocks. "Balancing that feature with the yield component makes it a really nice middle-ground dividend ETF option," he said. "It has a pretty good track record attached to it as well." The ETF is down 5% year to date. The WisdomTree U.S. LargeCap Dividend ETF targets dividend payers, removes some riskier high-yield names, and then increases the weight of those that score really well in quality and momentum characteristics, Jackson said. The ETF has a silver medalist rating and five stars from Morningstar. It has a 2.25% 30-day SEC yield, a 0.28% expense ratio and has lost less than 1% so far this year. Lastly, the SPDR S & P Dividend ETF is rated four stars with a silver medal from Morningstar. It has a 30-day SEC yield of 2.65% and a 0.35% expense ratio. "It's the portfolio of dividend die hards," Jackson said. It is the strictest of the dividend ETFs because it requires 20 consecutive years of paying out dividends, he explained. "While there is no profitability component built into the process explicitly, just by virtue of requiring 20 years of dividends, you're filtering out a lot of the lower-quality companies that haven't built up that track record yet," he said. The ETF is down less than 1% year to date.
Yahoo
21-04-2025
- Business
- Yahoo
Charles Schwab Q1 ETF Assets Jump 16% From Last Year
Charles Schwab Corp. (SCHW), the fifth-largest U.S. ETF issuer, said assets in its exchange-traded funds rose 16% since last year's first quarter as flows into its biggest funds jumped. Schwab, which manages 33 ETFs, said in an April 17 statement that assets in its proprietary ETFs jumped to $398.2 billion from $342.9 billion at the end of last year's first quarter. Since the previous quarter ended, assets inched up 1% from $395 billion, the Westlake, Texas-based company said. Assets gained year over year as broad equity indexes jumped, with the S&P 500 notching a 25% total return last year. Inflows slowed as markets dropped this year, however, as fears of recession and inflation sparked by President Donald Trump's trade war have pushed the S&P 500 10% lower so far in 2025. Investors were met with 'an increasingly uncertain environment' in the first quarter, Schwab Chief Executive Officer Rick Wurster said in the statement. As markets tumbled in the first quarter and investors moved money into safer investments, Schwab's largest ETF, the $64.9 billion Schwab US Dividend Equity ETF (SCHD), pulled in $3.8 billion. That fund pulled in $12.1 billion since last year's first quarter. It includes companies with 10-year histories of paying dividends, which are widely considered safer investments. As markets became increasingly volatile during the first quarter, many investors chose to buy stock funds as prices dropped, and Schwab's second-largest ETF, the $47.5 billion Schwab U.S. Large-Cap ETF (SCHX), pulled in $812 million. Still, that fund has dipped 10% this year. Net purchases of ETFs at Schwab dropped 17% from the fourth quarter, falling to $63.1 billion from $76.2 billion. Source: data Schwab clients' portfolios grew fatter year over year, the company said, with the average client's assets up 15% to $2.3 million. That was mostly due to a 22% jump, to $658,588, in average holdings of ETFs, collective trust funds, and equity and bond funds. The U.S. ETF industry's overall inflows dipped 32% from $427 billion in last year's fourth quarter to $291 billion during the first quarter, State Street said last week, citing Morningstar Data. Still, they jumped 41% from last year's first-quarter total of $191 | © Copyright 2025 All rights reserved
Yahoo
13-04-2025
- Business
- Yahoo
An Individual Is Ready To Invest $10,000 And Turns To Reddit For Advice: 'I'm Looking For A Decent Yield And A Little Growth'
Investing money into dividend stocks can result in steady cash flow. Gradually putting money into these investments will increase your dividend income over time, but some people receive a windfall of cash that they can deploy right away. One Redditor finds themselves in that position. The individual is set to have $10,000 sometime next week and has been following the Dividends subreddit for a while. Now, after consuming content from the group for a while, the Redditor is looking for advice. "I'm looking for a decent yield and a little growth," the Redditor explained when asking for recommendations. Don't Miss: Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — In addition to the immediate $10,000 investment, the Redditor aims to invest $250 each month. Other Redditors shared their thoughts in the comments. One commenter suggested staggering the $10,000 investment instead of putting it all into the market at once. This approach can help the Redditor capitalize on any price dips instead of unloading all of their capital and watching their assets lose value. Many investors on Reddit seem to be jittery about the recent trade war. The popular consensus on Reddit is that the market will continue to tank, and that fear showed up again in the comments. Trending: BlackRock is calling 2025 the year of alternative assets. An investor who wants to dollar cost average as the market goes down may want to consider breaking the $10,000 investment into several investments. The amount of times you break down the $10,000 should depend on your risk tolerance, your thoughts about current prices, and what you think the stock market will look like in five to 10 years. The original poster mentioned some ETFs and received comments that suggested some ETFs as well. The Schwab US Dividend Equity ETF (NYSE:SCHD) was the first ETF the original poster mentioned. It's no surprise to see SCHD mentioned in the Dividends subreddit since it seems to be a fan favorite. The SPDR S&P 500 Trust (NYSE:SPY), JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ), and the JPMorgan Equity Premium Income ETF (NYSE:JEPI) were some of the other ETFs that were mentioned in the post and the these recommendations don't mean much since we don't know much about the Redditor. One of the top commenters pointed this out. 'What to invest in depends a lot on your personal situation. You didn't provide any details about age, income, investment objectives (other than decent yield and a little growth, which is a relative idea), risk tolerance, jurisdiction, investment currency, etc., so it's hard for any meaningful advice to be given." The best stocks and ETFs for one person may be different from the best assets for another person. Some people pursue high-yield stocks as they get closer to retirement, while others buy growth stocks when they are younger to maximize their potential returns. Personal details like risk tolerance and income play a role in which stocks and ETFs make sense for you. Read Next:Inspired by Uber and Airbnb – Deloitte's fastest-growing software company is transforming 7 billion smartphones into income-generating assets – Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article An Individual Is Ready To Invest $10,000 And Turns To Reddit For Advice: 'I'm Looking For A Decent Yield And A Little Growth' originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved.
