If You Invest $5,000 in SCHD Today, Here's the Passive Income It Could Deliver in 20 Years
Yahoo Finance ·
The Schwab U.S. Dividend Equity ETF ( SCHD +0.43% ) is one of the most popular dividend-focused exchange-traded funds (ETFs). That's due to its combination of a high current yield (around 3.3%) and a strong dividend growth rate (an 11.2% compound annual growth rate since 2017). Here's a look at how much passive income a $5,000 investment in this ETF could deliver in 20 years. Investing $5,000 into the Schwab U.S. Dividend Equity ETF would generate $162.50 of annual dividend income at the ETF's trailing 12-month yield of 3.25%. The ETF would deliver $3,250 of cumulative dividend income if it maintained its current rate for the next 20 years. That's likely an extremely conservative estimate, given that dividend growth is one of the hallmarks of this ETF. It tracks an index that screens companies based on four dividend-quality characteristics, including the five-year dividend growth rate. That dividend growth focus is why this ETF has grown its payout at an 11.2% compound annual rate since 2017.
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