Finding just the right dividend investment can be challenging, as you want to have some good diversification, a solid yield, and you want to ensure your risk isn’t all that high.
Striking a good balance between yield and risk isn’t easy, but there’s one exchange-traded fund (ETF) that does an excellent job of that, and it’s the Schwab U.S
Dividend Equity ETF (NYSEMKT: SCHD). Here’s why I think this is an investment that can be a suitable option for any dividend investor. The fund’s selection of dividend stocks is top-notch What’s appealing about the Schwab fund is that its portfolio isn’t overly diverse, which inevitably leads to having just a minor position in many stocks.
It has around 100 holdings, carefully selected to meet its criteria, which are based on financial ratios to ensure the underlying fundamentals are strong. That means many high-risk dividend stocks won’t make the cut, even if their yields are high. The mix of stocks makes it clear this is a fairly low-risk investment.