The Schwab U.S. Dividend Equity ETF (SCHD Quick QuoteSCHD - Free Report) was launched on October 20, 2011, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.

The fund is sponsored by Charles Schwab. It has amassed assets over $87.08 billion, making it the largest ETF attempting to match the Large Cap Value segment of the US equity market.

Why Large Cap Value

Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.06%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 3.41%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Energy sector -- about 22.4% of the portfolio. Consumer Staples and Healthcare round out the top three.

Looking at individual holdings, Lockheed Martin Corp (LMT) accounts for about 4.92% of total assets, followed by Conocophillips (COP) and Verizon Communications Inc (VZ).

The top 10 holdings account for about 42.54% of total assets under management.

Performance and Risk

SCHD seeks to match the performance of the Dow Jones U.S. Dividend 100 Index before fees and expenses. The Dow Jones U.S. Dividend 100 Index is designed to measure the performance of high dividend yielding stocks issued by U.S. companies that have a record of consistently paying dividends, selected for fundamental strength relative to their peers, based on financial ratios.

The ETF has added roughly 13.88% so far this year and is up about 27.99% in the last one year (as of 04/22/2026). In the past 52-week period, it has traded between $25.42 and $31.86.

The ETF has a beta of 0.70 and standard deviation of 13.01% for the trailing three-year period, making it a medium risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.

Alternatives

Schwab U.S. Dividend Equity ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SCHD is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Vanguard High Dividend Yield Index Fund ETF Shares (VYM) and the Vanguard Value Index Fund ETF Shares (VTV) track a similar index. While Vanguard High Dividend Yield Index Fund ETF Shares has $75.62 billion in assets, Vanguard Value Index Fund ETF Shares has $169.74 billion. VYM has an expense ratio of 0.04% and VTV charges 0.03%.

Bottom-Line

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.