The Schwab U.S. Dividend Equity ETF (SCHD -0.71%) is one of the market’s most popular dividend-focused exchange-traded funds (ETFs). It passively tracks the Dow Jones U.S. Dividend 100 Index, and it charges a low expense ratio of 0.06%.
SCHD pays a trailing yield of 3.13%. Its top holdings include Abbott Laboratories, Amgen, Merck, and Coca-Cola. Since its launch on Oct. 20, 2011, it delivered a total return of 562%.
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How much income could it generate over the next 20 years?
Past performance doesn’t guarantee future gains, but putting $100 a month into SCHD over the next 20 years is still a simple, low-stress way to grow your retirement portfolio.
Schwab U.S. Dividend Equity ETF
Today’s Change
(-0.71%) $-0.25
Current Price
$34.28
Key Data Points
AUM
$109B
Dividend Yield
3.06%
Expense Ratio
0.06%
Top Holdings
ABT
4.77%
AMGN
4.59%
MRK
4.43%
If SCHD matches its historical growth rate of 10% every year for the next 20 years, the $24,000 you had invested over those 240 months (with reinvested dividends at 3.5%) would grow to nearly $76,000.
If you didn’t reinvest those dividends, the value of your portfolio would only grow to about $49,000 — but you would have collected about $15,000 in dividends during those two decades. That combined value of $64,000 would be lower than your total return with reinvested dividends, but you would have a lot more liquidity to cover your everyday expenses.
Leo Sun has positions in Coca-Cola. The Motley Fool has positions in and recommends Abbott Laboratories, Amgen, and Merck. The Motley Fool has a disclosure policy.
