Schwab's Dividend ETF Has Nearly Quadrupled Its Payout Since 2012

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Dividend Growth Slows for Schwab ETF, Local Income Investors Take Note

SCHD’s payout surge has paused, raising questions for South Africans hunting steady income.

The Schwab U.S. Dividend Equity ETF (SCHD) has been a poster child for compounding income, nearly quadrupling dividends since 2012. That’s impressive and explains the 12% yield on cost early investors have enjoyed. But the story now shifts. Dividend growth has dropped sharply to just 1% this year. For South African investors, this matters because it signals that chasing similar US dividend ETFs won’t offer the same punch going forward, especially once you factor in rand volatility. The USD/ZAR rate has recently been choppier, and a weaker rand can erode that thin 3.2% current yield SCHD offers to new buyers. Compared locally, SA banks such as Standard Bank and FirstRand still offer better yield cushions and more reliable growth given our market’s structural income orientation. If SCHD’s dividend growth stalls, local financials and even select retailers like Shoprite might hold safer income ground. This view can be wrong if US inflation cools faster than expected, reigniting dividend hikes and boosting USD strength, which would enhance foreign income streams. this is just our opinion and not financial advice