Want Decades of Passive Income? Buy This Index Fund and Hold It Forever
Key Points
The Schwab U.S. Dividend Equity ETF represents 101 high-quality dividend stocks under a single ticker symbol.
Unlike many stock-market ETFs, it has limited exposure to technology stocks.
As a result, it's a wonderful hedge against an increasingly uncertain future amid AI disruption.
- 10 stocks we like better than Schwab U.S. Dividend Equity ETF ›
If you invest for dividends, it's important to diversify your portfolio so you're not relying on a small handful of companies for all of your dividend income. It can be intimidating trying to figure out which companies to invest in or how much to invest in each.
Fortunately, there's a brilliant shortcut. When you buy the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD), you're technically investing in 101 various companies. In other words, it's a diversified dividend portfolio right out of the box.
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Here is why you can hold this rockstar dividend exchange-traded fund (ETF) forever.
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The anti-tech ETF for steady dividends
It's hard to avoid technology stocks these days. The "Magnificent Seven" stocks have grown so large that they now represent roughly one-third of the S&P 500, the most popular U.S. stock market index.
The Schwab U.S. Dividend Equity ETF is the antithesis of that, making it a compelling alternative for any investors seeking more exposure to other market sectors. It tracks the Dow Jones U.S. Dividend 100™ Index, and is only 8.2% weighted to technology.
The ETF's top holdings include blue chip dividend stocks, such as Lockheed Martin, ConocoPhillips, Chevron, Verizon Communications, Bristol Myers Squibb, Altria Group, Coca-Cola, and PepsiCo. Most of these companies have dominated non-tech industries for decades and have long histories of paying and increasing their dividends.
Currently, the Schwab U.S. Dividend Equity ETF yields about 3.4%, so it offers meaningful dividend income from the jump.
AI innovation may actually put a premium on non-tech businesses
As exciting as artificial intelligence (AI) is, the future is suddenly quite uncertain. AI bots have gone from glorified search engines to autonomous digital workers in just a few years. The recent software stock sell-off is a prime example of just how disruptive AI innovation can be.
The flip side of that is the possibility that investors place more value on non-tech businesses, where AI could be a catalyst rather than a threat. For instance, AI will likely lead to more advanced automation, even humanoid robotics. It could aid drug discovery for pharmaceutical companies. The list goes on.
The Schwab U.S. Dividend Equity ETF's four most heavily weighted sectors are energy, consumer staples, healthcare, and industrials. These are all potential winners as AI changes the world. It makes the ETF a potentially brilliant way to hedge against AI disruption while pumping dividends into your portfolio. In light of this, it's hard not to like the ETF as a buy-and-hold forever investment idea.
Should you buy stock in Schwab U.S. Dividend Equity ETF right now?
Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this:
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*Stock Advisor returns as of March 14, 2026.
Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bristol Myers Squibb and Chevron. The Motley Fool recommends ConocoPhillips, Lockheed Martin, and Verizon Communications. The Motley Fool has a disclosure policy.
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