SCHD: A Great Foundation For Long-Term Wealth Building

The Schwab U.S. Dividend Equity ETF is an ETF that tracks the Dow Jones U.S. Dividend 100 Index. The aim of the index is to track high dividend yielding stocks with a history of consistently paying dividends. The companies that pass the litmus test are some of the best run and most shareholder friendly companies in the country. It's important to emphasize the growing income stream as it has been growing steadily since the funds inception in 2011. The fund features an expense ratio of 0.07%, lower than many funds including one of SCHDs competitors VYM (0.10%). From my own personal circumstances, this is substantially lower than what I was experiencing and a big plus in my book.

The weakness in the equity markets in 2015 has also created a fantastic buying opportunity for those with long horizons. No one knows what will happen down the road but it feels like a steal being able to buy these companies for prices not seen since the beginning of 2014 along with an all time high yield. SCHD is a great ETF product that will allow investors to not only capture higher yield than a regular index fund but will also grow that income quicker than the index fund all while having a similar return profile. The constituent companies are gone through a rigorous screening process to only let the best ones into the fund. You then own a wide variety of companies while keeping your personal expenses low. It's for these reasons that it is a great base for building your retirement castle.

Source: Seeking Alpha

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