Dividend investors have to take into account a lot of different factors when purchasing individual stocks. Those factors do not go just because you are buying a dividend-focused exchange-traded fund (ETF). In fact, because you are giving your money to someone else to manage while buying an ETF, you should have a good understanding of how the fund invests your money. Schwab us dividers equity ETF ,Rider 0.47%,Which trades well under $ 100 per share stands as an attractive option for income investors.

What does Schwab US Dividend Equity ETF do differently?

From the perspective of a large picture, Schwab US Dividend Equity ETF is inevitably done what you were buying dividend stock one by one. ETF invests in companies that run financially strong and well, there are history of dividend growth, and sports are attractive yields.

To do this, the Schwab US Dividend Equity Tracks ETF Dow Jones Dividend 100 Index that focuses only on companies that have increased their dividends for 10 consecutive years or more (Real Estate Investment Trust, or REIT, thoughts). Once this list is done, a composite score is made based on cash flow for total loans, DividendDividend yield, and the company’s five -year dividend growth rate.

Each factor is important. Cash flow for total debt sees financial strength. The return on equity checks the quality of the business. Dividend yield, well, is the dividend yield. And the five -year dividend growth rate represents stability and management commitment to share capital to shareholders. 100 highest scoring companies are included in the Dow Jones Divide 100 index and weighted by market capitalization. Schwab works to repeat the holdings and returns of the US Dividend Equity ETF index, and it does with a very minor expense ratio 0.06%.

Why is Schwab US Dividend Equity ETF why is such a smart investment?

The first reason for liking Schwab US Dividend Equity ETF is that its underlying screening criteria matches to a large extent that investors are usually looking at A dividend stock,

The second reason for buying it is demonstration. ETF’s dividend yield is 4.0% as this writing, well above 1.3% you will collect from one S&P 500 Index Fund.

Data by Ycharts,

The yield is clearly attractive, but look at the graph above. Over time, the dividend has become a higher trend along with the price of ETF. This means a growing income stream and share price appreciation, which is an ideal result for most dividend investors.

Meanwhile, thanks to regular rebalansing by dividend 100 index, Schwab US Dividand Equity ETF also regularly adjusts its holdings, so it is invested in the most attractive dividend stock candidates based on screening requirements.

If you prefer simple, Schwab US Dividend Equity ETF Working hard for you

If you have $ 100 and want to invest a reliable dividend, the Schwab US Dividend Equity ETF is likely to be a smart option for you. This $ 100 will find you three full shares in the form of this writing, and if you provide your brokerage Divided shareYou can buy close to four of them.

Sure, dividends are focused exchange traded funds These are less complex. They can track the index that select stock only on the basis of dividend yield, for example. But buying based on the yield alone can leave you with portfolio of high -risk investments. Schwab US Dividend Equity ETF helps you screen for quality dividend stock without any complex work. A liberal yield, growing dividend, and capital appreciation can all work together to make a top pick for income investors.