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Update on New Schwab Dividend ETF

by
October 20, 2011 12:38 pm
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Earlier this week, Benzinga reported the Schwab U.S. Dividend Equity ETF (NYSE: SCHD) would make its debut today, bringing California-based Charles Schwab’s (NYSE: SCHW) ETF lineup to 15.

While not favoring one or the other when it comes to dividends and capital appreciation, the Schwab U.S. Dividend Equity ETF takes a blended approach that seeks to track financially strong companies, relative to their peers, that have a history of paying dividends, according to a statement issued by Schwab.

Dividend ETFs continue to surge in popularity, so ETF sponsors need to find unique ways to attract and retain assets. In the case of SCHD, a minute 0.17% expense ratio should help. In addition, Schwab clients can trade the new ETF commission-free. All Schwab ETFs are available commission-free to Schwab clients.

According to data on the Schwab Web site, SCHD holds 99 stocks with double-digit allocations to the following sectors: consumer staples, industrial, health care, information technology, energy and consumer discretionary.

The new ETF’s top-10 holdings, which account for about 42.5% of the fund’s weight, include nine Dow stocks with PepsiCo (NYSE: PEP) being the lone exception. Intel (Nasdaq: INTC) is SCHD’s largest holding followed by Exxon Mobil (NYSE: XOM), IBM (NYSE: IBM), Chevron (NYSE: CVX) and Procter & Gamble (NYSE: PG) in the top five.


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