ETF Talk: Patience Pays with This ETF

Jean-Jacques Rousseau, a Swiss philosopher and key figure in the Age of Enlightenment, once said, “Patience is bitter, but its fruit is sweet.”

Now, while I don’t always agree that patience is bitter, or that its fruit is always sweet, I have learned, in the stock market especially, that immediacy is not always the surest way to reward. So, today, we shall delve into a dividend exchange-traded fund (ETF) that may pay us to be patient.

The Schwab U.S. Dividend Equity ETF (NYSEARCA: SCHD) is not known for its explosive growth, or headline grabbing moves, but that isn’t always a bad thing. Sometimes, the quiet fund in the background is the strongest of them all.

At its core, SCHD is designed to track the Dow Jones U.S. Dividend 100 Index, a curated list of companies that not only pay dividends but have the financial discipline to keep doing so. The fund has a screening process that favors firms with at least a decade of consistent dividend payments, then layers on quality metrics like return on equity, free cash flow strength and dividend growth.

The result of this? A portfolio of roughly 100 holdings populated by household names like Coca-Cola, PepsiCo, Cisco and Chevron — companies that treat dividends not as optional generosity, but as a core part of their shareholder contract.

Now that I’ve laid out the fundamentals, let’s dive into the main attraction of SCHD: the dividends. SCHD currently yields in the ballpark of roughly 3.4%, with annual payouts around $1.04 per share, distributed quarterly. While that yield is not the flashiest, it still occupies the space between comfortably above the S&P 500 so far this year and far enough from the danger zone of a yield that is almost too good to be true. Moreover, SCHD’s dividend stream has shown a pattern of growth over time — which reconnects us to the point that while patience may sometimes be bitter, in this case its fruit is sweet.

Currently, the fund has net assets of $85.9 billion and assets under management of $83.87 billion. If that isn’t “sweet” enough, cost-conscious investors may be even more impressed with its outrageously low expense ratio of 0.06%.

Courtesy of stockcharts.com

Looking at the chart above, it’s easy to see the gains of this ETF so far in 2026. Unlike many funds that have reacted with the market mayhem, SCHD has trended up. Further, it currently is trending well above its 200-day moving average and keeping up with its 50-day moving average.

Going back to the mention of household names that make up its portfolio, the fund’s top 10 holdings include Lockheed Martin Corporation (LMT), 4.81%; ConocoPhillips (COP), 4.32%; Verizon Communications Inc. (VZ), 4.31%; Chevron Corporation (CVX), 4.31%; Bristol-Myers Squibb Company (BMY), 4.28%; Merck & Co., Inc. (MRK), 4.23%; Altria Group, Inc. (MO), 4.13%; Texas Instruments Incorporated (TXN), 4.06%; The Coca-Cola Company (KO), 4.03% and PepsiCo, Inc. (PEP), 4.01%.

Ultimately, SCHD is not flashy, it doesn’t provide an immediate reward and it isn’t the “get rich quick” fund. But it is a dependable investment for interested investors with its disciplined selection, efficient structure and continued dividends. So, it may pay for patient investors to do their own due diligence on this quiet giant.

Of course, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.