SCHD DCA Backtest
If you'd invested $700 every month, how long to $1M?
SCHD (Schwab U.S. Dividend Equity ETF) bundles about 100 high-quality U.S. companies that 'pay dividends consistently and well.' Charles Schwab launched it in 2011, and it tracks the Dow Jones U.S. Dividend 100 Index. Unlike the tech-growth-heavy Nasdaq-100, it leans toward sturdy companies with long dividend track records, making it a popular flagship for 'dividend growth' investing.
Even over the full period, that's about $339.31K today · invested $124.6K · annualized +13%
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What kind of companies does SCHD pick?
The Dow Jones U.S. Dividend 100 Index that SCHD tracks doesn't hold just any company simply because it has a high dividend yield. First it narrows the field to companies that have paid dividends consistently for at least 10 years, then selects about 100 by weighing financial health — like debt relative to cash flow and return on equity (ROE) — alongside dividend yield and five-year dividend growth. In other words, it picks companies that can 'pay healthily for a long time,' not just those that 'pay a lot.'
As a result, its sector mix looks quite different from the Nasdaq-100. Tech weight is low; instead, so-called 'value and dividend' companies in industrials, financials, healthcare, consumer staples, and energy take up big positions. Think of it as a different-flavored basket of the same U.S. stock market.
What 'dividend growth' means, and the payout schedule — it's not monthly
Dividend growth refers to companies that have raised their dividend a little each year. Being able to keep raising dividends is read as a sign that profits are growing steadily, which is why it's cited as SCHD's core appeal.
To clear up a common misconception: SCHD is not a 'monthly dividend' ETF — it pays dividends every three months (quarterly). The mix-up tends to arise because people build monthly-income portfolios by combining several ETFs that pay in different months. The dividend yield varies by period but is generally higher than the S&P 500 average, and this site's backtest is computed on a dividend-reinvested adjusted-close basis (assuming dividends received are used to buy more shares).
How it differs from growth indexes (QQQ, S&P 500)
In stretches where tech leads the market — like much of the past decade or so — SCHD's total return lagged QQQ or the S&P 500 in many periods. You can see this in the result box above, where its final balance often comes out lower than growth or leveraged tickers. That's because, in choosing dividends and lower volatility, it gives up some of the explosive price appreciation.
In exchange, its drawdowns in a decline tend to be relatively shallow, its volatility lower, and it delivers a steady cash flow from dividends. In short, SCHD leans toward 'getting paid dividends while shaking less' rather than 'earning more.' Which one is better varied by person and by period, so it's best to compare them in the calculator by swapping only the ticker under the same conditions.
A note on taxes
How dividends and capital gains are taxed depends entirely on your country of residence and your personal situation — the rules, rates, and any withholding differ from place to place. This isn't tax advice, and there's no single rate that applies to everyone, so it's worth checking with a local tax professional before treating dividends as a reason to hold SCHD.
One thing to keep in mind about the numbers here: this site's results are pre-tax, computed on a dividend-reinvested adjusted-close basis (assuming dividends are used to buy more shares). If you actually take dividends as cash, your after-tax outcome can differ from what's shown. This article is for information, not investment advice, and past returns don't guarantee the future.
Want to change the amount, buy day, or goal? Use the button above to calculate it yourself.
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This content is for informational purposes and is not investment advice or a recommendation. You are solely responsible for your investment decisions.