Schwab Dividend ETFs: SCHD vs. SCHY

3 months agoUS
Schwab Dividend ETFs: SCHD vs. SCHYSource: seekingalpha.com
This article compares two popular dividend ETFs from Schwab: the U.S. Dividend Equity ETF (SCHD) and the International Equity Dividend ETF (SCHY), providing insights for investors seeking dividend income.

Key Insights

SCHD focuses on high-quality, high-yielding U.S. dividend stocks with a history of dividend growth.

SCHY invests in international (ex-U.S.) high-dividend stocks, offering diversification.

SCHD has delivered strong annualized returns since its inception in 2011.

SCHY has outperformed the MSCI ACWI ex USA IMI index over the past year.

Both ETFs track Dow Jones indexes that emphasize dividend consistency and financial health.

SCHD has an expense ratio of 0.06%, while SCHY charges 0.08%.

In-Depth Analysis

The Schwab U.S. Dividend Equity ETF (SCHD) targets U.S. companies with strong dividend yields and consistent dividend growth. It screens companies based on dividend yield, five-year dividend growth rate, and financial strength. SCHD's top holding is currently Lockheed Martin (LMT&ref=yanuki.com), demonstrating its focus on established, cash-generating companies. SCHD has a roughly 3.5% yield.

The Schwab International Equity Dividend ETF (SCHY) offers exposure to dividend-paying companies outside the U.S. It tracks the Dow Jones International Dividend 100 index, comprising 100 ex-U.S. high-dividend stocks, and is classified as a foreign large-cap value fund. SCHY beat the MSCI ACWI ex USA IMI index by nearly 400 basis points in the 12 months ending Feb 26. SCHY has a trailing-12-month distribution yield of 3.36%.

Why this matters: Both ETFs provide access to dividend income, but cater to different investment strategies. SCHD offers stability through established U.S. dividend growers, while SCHY provides international diversification. Investors can use these ETFs to tailor their portfolios to their specific risk tolerance and income needs.

FAQs

Q: What is the expense ratio of SCHD?

SCHD has an expense ratio of 0.06%.

Q: What index does SCHY track?

SCHY tracks the Dow Jones International Dividend 100 index.

Q: What is the dividend yield of SCHY?

SCHY has a trailing-12-month distribution yield of 3.36%.

Key Takeaways

Consider SCHD for U.S. dividend stock exposure and a focus on dividend growth.

Opt for SCHY to diversify your dividend income stream with international stocks.

Evaluate your risk tolerance and investment goals to determine the appropriate allocation to each ETF.

Discussion

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