Are You Leaving Money on the Table? The 4 Highest-Yielding Schwab ETFs

Key Points

Schwab US Dividend Equity ETF (SCHD) yields 3.88% and holds 103 large cap companies screened for dividend consistency and strong cash flow.
SCHD has $71.55B in net assets with a 0.06% expense ratio and five-year return of 30%.
Schwab International Dividend Equity ETF (SCHY) yields 4% and provides exposure to dividend stocks outside the United States.
If you’re focused on picking the right stocks and ETFs you may be missing the bigger picture: retirement income. That is exactly what The Definitive Guide to Retirement Income was created to solve, and it’s free today. Read more here

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By Javier Simon Published Dec 10, 2025 at 10:19 AM EST

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Are You Leaving Money on the Table? The 4 Highest-Yielding Schwab ETFs — © 24/7 Wall St.

Generating a regular stream of income is a key component of any retirement planning playbook. And there are many avenues to this. One is by approaching dividend paying stocks.

Dividends are portions of a company’s profits that are paid out to shareholders. But it can be difficult to pick out the right dividend stocks for your portfolio. This is why many investors turn to exchange-traded funds (ETFs). ETFs may invest in hundreds or even thousands of dividend paying stocks handpicked by professionals. So they offer instant diversification and a certain degree of security.

Many investors seek out ETFs with high yields. The yield represents the income it generates as a percentage of the fund’s value.

But the pool of dividend paying ETFs is large as well. So we decided to narrow down the highest-yielding ETFs run by Schwab, one of the largest and most established brokerages in the country.

So let’s take a look.

Schwab U.S. Dividend Equity ETF (SCHD)

The Schwab U.S. Dividend Equity ETF (SCHD) is quite popular among investors today. It has a high yield of around 3.88%. The fund invests in 103 high quality, large cap companies within the Dow Jones U.S. Dividend 100 Index. SCHD fund managers screen these companies for consistent dividend payments as well as strong financials like cash flow. The sectors it mainly focuses on are energy, consumer staples and healthcare sectors. These are generally considered defensive sectors. This means these types of companies have been known to remain resilient even in times of economic distress.

The fund’s top holdings include Cisco (NASDAQ:CSCO), PepsiCo (NASDAQ:PEP) and Home Depot.

But the fund also stands out for its low expanse ratio of 0.06%. This is important because expense ratios represent fees that can eat away at your returns. Moreover, SCHD has net assets of $71.55 billion. And it boasts an impressive five-year return of about 30%.

Schwab International Dividend Equity ETF (SCHY)

Combined with SCHD, the Schwab International Dividend Equity ETF (SCHY) can offer global diversification. SCHY invests in high-yielding stocks offered by companies outside of the United States. This ETF generates a yield of around 4%.

The fund’s main holdings are in financials, industrials and consumer staples. Moreover, it holds $1.36 billion in net assets. And it has a five year return of about 15.37%.

The Schwab Fundamental International Eq ETF (FNDF)

The Schwab Fundamental International Eq ETF (FNDF) offers a yield of about 2.85%. The fund invests in large non-U.S. companies in emerging markets. Its main holdings are in the financials, industrials and consumer discretionary sectors. Among its top holdings are the companies Samsung, Shell and Total Energies.

This ETF has a slightly higher expense ratio than the other equity ETFs on our list. Its expense ratio is 0.25%, which is still competitive among the industry. And among its highlights is a five year return of about 53.50%.

The Schwab High Yield Bond ETF (SCYB)

Diversification is key to any portfolio. And so far we’ve covered equity based ETFs. But Schwab also stands out for the Schwab High Yield Bond ETF (SCYB). This fund invests in below investment grade corporate bonds. It generates a yield of about 6.96%. And it has a five year return of about 6%. Moreover, it offers a very low expense ratio of 0.03%.

A note on high yields

Higher yields aren’t always better. ETF yields are based on the yields offered by the companies it holds. Some ETFs may simply screen companies for projected yields. But they may not look closer into these companies to see how they are performing. Luckily, ETFs like SCHD also rank companies for their financial strength. But that’s not always the case.

And sometimes, it may sound too good to be true. Some companies in distress may offer higher than average yields simply to attract investors. And remember, companies can increase, decrease or cease yields at any time. So it’s important to take a closer look at high yield ETFs.

At any given time, there will be an average range for ETF yields. If the ETF you’re looking at sharply deviates from this range, it may be a red flag. But any potential investment requires your due diligence.

So take a close look at high-yield ETFs you’re considering. Look at the performance of their top holdings and sectors. Examine their expense ratios as well as past performance and other important factors.

Above all, make sure they align with your investment goals and risk tolerance.