The Schwab U.S. Dividend Equity ETF is a low-cost fund that gives investors exposure to around 100 of America’s strongest dividend-paying companies. It holds household names like Chevron, Verizon, and Merck — businesses with long track records of paying and growing their dividends year after year. What makes SCHD stand out is its quality filter: companies must have paid dividends consistently for at least ten years and pass a financial health screen before they’re included. For Australian investors, it offers a simple, affordable way to tap into U.S. dividend income, with an annual fee of just 0.06%, it’s about as cheap as passive investing gets. The catch and potential benefit today, as discussed earlier, is that it’s priced in US dollars, so currency movements between the AUD and USD will affect your returns.
This ETF has returned 14% year to date, absolutely trouncing the S&P 500’s ~4.2% total return, as AI and deteriorating economic conditions and geopolitical unrest are causing plenty of stock and sector rotation, with this ETF a clear beneficiary. The ETF is currently forecast to yield ~3.5% (unfranked) over the next 12-months, far from exciting compared to alternatives in Australia, but it does afford investors a conservative entry into the US market with the bonus of the strong purchasing power of the $A.
- We are initially targeting new highs above $US32, but if US stocks remain firm through 2026, it could trade much higher.
