Last week’s dramatic market plunge followed by a $5.5 trillion surge triggered by President Trump’s temporary tariff pause is emblematic of the volatility investors have experienced over the past five years.
From trade wars to tech booms, investors are left yearning for calm. The Schwab U.S. Dividend Equity ETF (SCHD) emerges as an island of stability in this storm. Offering a 4.2% yield and a mere 0.06% expense ratio, SCHD tracks the Dow Jones U.S. Dividend 100 Index, prioritizing U.S. companies with robust financials and consistent dividends.
SCHD’s strength lies in its disciplined approach. It selects stocks with a decade of uninterrupted dividend growth, then ranks them by cash flow strength, return on equity, yield, and dividend growth history. The process yields a portfolio of resilient dividend titans like Altria (MO) and Chevron (CVX), companies that weathered the 2008 to 2010 financial crisis better than the broader market, dropping in the 30% range compared to 50% for the S&P 500.
Even after swapping out names like BlackRock (BLK) for fresher picks like ConocoPhillips (COP) in its 2025 reconstitution, SCHD maintains a lean, high-quality roster.
Its sector balance further insulates it. With 19% in financials, 17% in healthcare, and 14% in consumer staples, SCHD leans on industries that endure downturns, unlike the S&P 500’s tech-heavy 29.6% weighting.
In 2020’s crash, staples fell just 20% while tech-heavy indexes plunged over 30%. SCHD’s low beta of 0.82 underscores its muted swings, a haven when markets gyrate.
The ETF’s yield is three times greater than S&P 500’s 1.4%, delivers steady income and grew 22% in 2025’s latest payout, outpacing its 12% decade-long average.
Multiple studies show dividend stocks held firm in past bear markets, generating 6% annual returns over the last 50 years compared to 0% returns for non-dividend payers. For those prioritizing income over speculative gains, SCHD’s reliability is unmatched.
Cost and diversification seal its appeal. With an expense ratio that dramatically undercuts the 0.89% average for similar ETFs, SCHD preserves wealth in turbulent times. Its 103 holdings also spread risk across seven sectors, with no stock exceeding 4% of the total and no sector allowed to get above 25%. This contrasts with tech-laden funds that can be rocked by single-stock slides, like Nvidia’s (NVDA) 17% slide in 2025.
SCHD’s $65.8 billion in assets and a 90% 10-year gain reflect its steady climb, allowing it to keep pace with the S&P 500 during the latest market dip.
SCHD doesn’t chase headlines or hype. Instead, it offers a disciplined, income-focused strategy that thrives in uncertainty. For investors rattled by 2025’s unpredictable market swings, this ETF delivers peace of mind, blending safety with modest growth. Let others bet on volatile trends, you can stand straight alongside SCHD as a prudent choice for turbulent times.
