This Dividend ETF Has Outperformed Many Actively Managed Funds Over a Decade

Will AI make the world's archetypal trillionaire? Our squad conscionable released a study connected the 1 little-known company, called an "Indispensable Monopoly" providing the captious exertion Nvidia and Intel some need. Continue »

While scale ETFs are passively managed, meaning that they purpose to duplicate the show of the underlying index, you tin besides find actively managed ETFs, with experts astatine the helm to take which stocks volition beryllium successful the money and astatine what weighting successful bid to person market-beating returns.

Actively managed funds travel with a outgo -- they thin to person a higher disbursal ratio than passively managed ETFs. Common consciousness would dictate that the returns of these funds should much than marque up for the added disbursal incurred by investors. But if you look hard enough, you tin find immoderate passively managed ETFs, specified arsenic the Schwab US Dividend Equity ETF (NYSEMKT: SCHD), that bash highly good and person outperformed galore fashionable actively managed funds implicit the past decade.

The Schwab US Dividend Equity ETF tracks the Dow Jones U.S. Dividend 100 Index, which comprises 100 U.S.-based companies with astatine slightest 10 consecutive years of dividend payments. That provides investors with vulnerability to a assortment of sectors, with user staples having the top exposure.

And the stocks successful this ETF correspond immoderate of the astir recognizable companies successful the world. The apical 10 holdings correspond 40% of the ETF's full weighting.

Source: Schwab Asset Management (weightings arsenic of April 8, 2026).

The money has an disbursal ratio of conscionable 0.06%, oregon $6 annually for each $10,000 invested. And its dividend output of 3.4% is overmuch higher than the 1.1% output of the S&P 500.