My First Year With SCHD As A Dividend Growth Investment

Last April, I purchased the Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) as a dividend growth investment when I rolled over my 401(k) into an IRA. I had studied about 20 dividend ETFs, and SCHD was the one I felt most closely matched my approach to dividend growth investing in stock selection and portfolio management. The ETF is based on the Dow Jones U.S. Dividend 100 Index (DJUSDIVT).

I am happy enough with SCHD's performance in the first 12 months that I have held it. When I bought it, I thought of it as if I were selecting a 2.9%-yielding dividend growth stock. In my first year of ownership, it in fact yielded 2.99% based on the original price paid. If I were going to convert all of our dividend growth investments into ETFs (which I am not considering at this time), I would want to select a small number of complementary ETFs that would make our total holdings more well-rounded than SCHD. Specifically, I would look for REIT and utility components to combine with what SCHD holds. I think that would also bring the combined ETF yields up closer to the 4-ish percent that I have come to expect from my investments in individual dividend growth stocks.

Source: Seeking Alpha

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