Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider the Schwab U.S. Dividend Equity ETF (SCHD), a passively managed exchange traded fund launched on October 20, 2011.
The fund is sponsored by Charles Schwab. It has amassed assets over $69.04 billion, making it the largest ETF attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.06%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 3.89%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Consumer Staples sector -- about 19.4% of the portfolio. Energy and Healthcare round out the top three.
Looking at individual holdings, Home Depot Inc (HD) accounts for about 4.31% of total assets, followed by Chevron Corp (CVX) and Abbvie Inc (ABBV).
The top 10 holdings account for about 40.96% of total assets under management.
Performance and Risk
SCHD seeks to match the performance of the Dow Jones U.S. Dividend 100 Index before fees and expenses. The Dow Jones U.S. Dividend 100 Index is designed to measure the performance of high dividend yielding stocks issued by U.S. companies that have a record of consistently paying dividends, selected for fundamental strength relative to their peers, based on financial ratios.
The ETF has added roughly 0.07% so far this year and is down about 4.15% in the last one year (as of 10/17/2025). In the past 52-week period, it has traded between $24.32 and $29.53.
The ETF has a beta of 0.77 and standard deviation of 13.94% for the trailing three-year period, making it a medium risk choice in the space. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab U.S. Dividend Equity ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SCHD is an outstanding option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard High Dividend Yield ETF (VYM) and the Vanguard Value ETF (VTV) track a similar index. While Vanguard High Dividend Yield ETF has $65.10 billion in assets, Vanguard Value ETF has $147.48 billion. VYM has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Schwab U.S. Dividend Equity ETF (SCHD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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