■ ETF · August 22, 2026
SCHD and SCHY: A Global Dividend Pairing Strategy
The Schwab U.S. Dividend Equity ETF (SCHD) is a favorite for dividend investors, but it lacks international exposure. Pairing it with the Schwab International Dividend Equity ETF (SCHY) can create a diversified global dividend portfolio.
Why SCHD Investors Might Consider SCHY
The Schwab U.S. Dividend Equity ETF (SCHD) has become a popular choice for income-focused investors, thanks to its rigorous selection methodology that combines dividend growth, balance sheet strength, and yield. However, its focus is exclusively on U.S. equities, leaving out a significant portion of the global dividend-paying market. For those looking to broaden their income stream internationally, the Schwab International Dividend Equity ETF (SCHY) offers a complementary approach.
SCHY employs a selection process similar to SCHD, targeting companies with at least 10 consecutive years of dividend payments. It then scores each candidate based on cash flow-to-total debt, return on equity, dividend yield, and five-year dividend growth rate, followed by a volatility screen. The final portfolio consists of 100 international stocks, providing a diversified set of high-quality dividend payers.
Pairing SCHD and SCHY in a Portfolio
Investors can pair SCHD and SCHY to create a global dividend portfolio. A common allocation might be 75% in SCHD and 25% in SCHY for those with a longer time horizon, while those closer to retirement may prefer a heavier U.S. tilt. The exact split depends on individual circumstances and risk tolerance.
Both ETFs are known for their attractive yields. SCHY currently offers a dividend yield of 3.7%, slightly higher than SCHD's yield, and its sustainability is supported by the solid balance sheets of its underlying companies. This makes SCHY a compelling addition for income seekers.
Key Metrics at a Glance
- SCHY's expense ratio: 0.08%
- SCHY's top holdings include ROP.SW (4.45%), ULVR.L (4.37%), and WES.AX (4.06%)
- SCHY's total assets: $2.5 billion
For investors already holding SCHD, adding SCHY can provide international diversification without sacrificing dividend quality. The two funds share a similar investment philosophy, making them a logical pair for a global dividend strategy.
What It Means for Income Investors
For income investors, combining SCHD and SCHY offers a way to access a broader set of dividend-paying companies across different geographies. This can potentially enhance yield and reduce concentration risk, though past performance does not guarantee future results.
Reporting based on: The Motley Fool. Figures verified against market data where available.