These 4 Schwab ETFs Are Built for Retirement Stability

If you’re someone who doesn’t like to research individual stocks to generate long-term returns, exchange-traded funds can be your ideal choice. They allow you to build a diversified portfolio at low cost. Charles Schwab is one of the most popular brokers that has been around for years. It offers several low-cost ETFs to choose from.

You’ll easily find a Schwab ETF that aligns with your risk appetite and investment goals. They also offer steady income and have low volatility. If you’re investing for stability during retirement, here are the four Schwab ETFs worth considering.

Retirees often do not have a high-risk appetite, which is why the Schwab US Dividend Equity ETF (NYSEARCA:SCHD) can be an ideal way to keep your investment safe while growing your wealth. The fund invests in companies that have a history of increasing dividends for over 10 years, which means you get quality over quantity.

It focuses on top-quality businesses that have demonstrated stability, resilience, and strength over the decade. The sector diversification is as follows:

The fund invests in some of the top dividend companies, including Chevron (NYSE:CVX), PepsiCo, Inc. (NASDAQ: PEP), and AbbVie (NYSE:ABBV).

SCHD has a yield of 3.78% and a low-expense ratio of 0.06%. The fund focuses on the Dow Jones U.S. Dividend 100 index and ensures predictable income year after year. Its yield outpaces S&P 500 and it has generated a 3-year annualized return of 7.43% and 5-year return of 12.87%.

The Schwab International Dividend Equity ETF (NYSEARCA:SCHY) tracks the Dow Jones International Dividend 100 index and offers ultimate portfolio diversification. The fund invests in non-U.S. companies that have a record of paying dividends for at least 10 consecutive years. It focuses on financially strong companies that have low volatility.

The only difference between SCHD and SCHY is that this ETF invests in non-U.S. dividend paying companies. SCHY has a yield of 4.27% and an expense ratio of 0.08%. The ETF is ideal for steady income generation, considering the risk profile. It holds 152 stocks, and the sector diversification is as follows:

Its top holdings include ENEL, Wesfarmers Ltd, British American Tobacco and Unilever PLC.

The fund’s highest investment is in the United Kingdom, followed by Australia, France and Switzerland. SCHY has generated a 1-year annualized return of 20.18% and 3-year annualized return of 11.45%.

The Schwab U.S. Large-Cap ETF (SCHX) is a passively managed fund which holds about 750 large cap stocks in the U.S. market. Since it invests in the biggest U.S. companies, you will get to own the Magnificent Seven in addition to several others. The fund holdings include:

SCHX is top-heavy with the top 10 stocks comprising 34% of the portfolio. It has a yield of 1.16% and has significant capital growth potential. The NAV of the fund is up 10% in 12 months and is trading for $24.64 today.

It has a low expense ratio of 0.03% and has shown strong performance in the past few years. The top holdings in the fund include NVIDIA (NASDAQ:NVDA), Apple (NASDAQ:AAPL), Tesla (NASDAQ:TSLA), and Microsoft (NASDAQ:MSFT). SCHX is tech-heavy and gives access to some of the best tech giants in the industry.

However, since the fund is heavily diversified, you shouldn’t worry about the returns in case of an overall market sentiment shift. It has a 3-year annualized return of 19.75% and a 5-year annualized return of 16.34%. SCHX has generated 14.13% returns since inception.

If you’re only looking for a high-yield during retirement, the Schwab High Yield Bond ETF (NYSEARCA:SCYB) will not disappoint. It may not produce steady returns and could remain flat, but it has a yield above 7%. This attracts income investors.

SCYB has an expense ratio of 0.03% and has generated an annualized 1-year return of 10.06%. It was launched in 2023 and is a fairy new fund which has over 1,800 holdings. A large part of the fund is invested in BB-rated bonds, followed by B-rated bonds.

It does not have any A-rated bonds, and the majority of the bonds have a maturity period ranging from 3 to 5 years. SCYB offers optimal diversification by investing in over 1,800 bonds, which is ideal for retirees since the bond interest is taxed as ordinary income. It is a passive fund with the potential to generate steady income for investors.