Key Points
The Schwab U.S. Dividend Equity ETF's focus on quality, dividend growth, and yield makes it an ideal fit in almost any portfolio.
Over the past decade, the fund has earned around 13% annually -- and here's how much an investment would be worth today.
The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is one of the most popular dividend ETFs in the world. Its selection criteria, which include consideration of balance sheet quality, yield, and dividend growth history, are among the most stringent and produce one of the most durable, high-quality portfolios around.
Even a modest $1,000 investment in the fund a decade ago would have grown into a relatively substantial amount. Over that time, it returned roughly 13% annually. Assuming no additional investments were made, that would have turned that original $1,000 into approximately $3,400 (assuming dividends were reinvested).
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But that return assumes that you would have bought and held throughout those 10 years. That meant staying put during the 2018 mini-bear market, the 2020 COVID-19 crash, and the 2022 bear market. That's not to mention a multi-year period where the markets were dominated by tech and artificial intelligence (AI) stocks.
The Schwab U.S. Dividend Equity ETF is a fund worth holding on to for the long haul. Those downturns would have created opportunities to buy shares at discounted prices, one of the best ways to enhance your long-term returns. Investors willing to make consistent monthly contributions to an ETF like this generally have a better chance of creating long-term wealth over the next 10 years.
The best strategy is to remain patient, reinvest those dividends, and keep your focus on the long term.
David Dierking has positions in Schwab U.S. Dividend Equity ETF. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.