There’s a lot of uncertainty among investors these days, with many worrying about inflation, job numbers, and the effect of tariffs, among other things. At such times, many investors look to blue chip stocks.
Blue chip stocks are those tied to leading, established companies — often ones that pay dividends. (A company generally has to be somewhat established, with fairly reliable earnings, before it commits to paying a regular dividend.)
A great way to invest in blue chip stocks is via an exchange-traded fund (ETF) — a fund that trades like a stock. There are numerous promising blue chip ETFs, and a particularly solid one to consider is the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD). Here’s why.
This ETF tracks the Dow Jones U.S. Dividend 100 Index — which encompasses 100 stocks with a track record of paying dividends for at least 10 years and which also seem financially sound. Focused on dividends (recent dividend yield: 3.7%), it offers a great mix of dividend income along with stock/ETF-price appreciation. Here’s its past performance:
Period |
Average Annual Gain |
---|---|
Past 3 years |
8.81% |
Past 5 years |
11.57% |
Past 10 years |
12.46% |
Source: Morningstar.com, as of Sept. 4, 2025.
See? Impressive! On top of that, you won’t forfeit much in fees: The ETF’s expense ratio (annual fee) is just 0.06%, meaning you’ll only pay $6 each year for every $10,000 you have invested in the fund.
Here are the ETF’s top 10 holdings:
Stock |
Weight in ETF |
Recent Yield |
---|---|---|
Chevron |
4.43% |
4.34% |
ConocoPhillips |
4.34% |
3.26% |
PepsiCo |
4.29% |
3.87% |
Altria Group |
4.26% |
6.37% |
AbbVie |
4.26% |
3.08% |
Merck |
4.11% |
3.85% |
Home Depot |
4.11% |
2.23% |
Cisco Systems |
3.96% |
2.41% |
Texas Instruments |
3.94% |
2.90% |
Verizon Communications |
3.81% |
6.13% |
Source: Yahoo! Finance and Morningstar.com, as of September 3, 2025.
So give this ETF some consideration and a closer look if you’re in the market for a long-term income-producing investment. It’s hard to go wrong with a basket of blue-chip stocks.
Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this: