I recently added more shares of the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD), continuing to build my position in one of my favorite dividend-focused funds.

Here are two key reasons I keep investing in SCHD.

A Growing Stream of Dividend Income

Generating reliable dividend income is central to my investment strategy. That steady cash flow not only provides passive income but also gives me additional capital to reinvest, helping accelerate long-term financial growth.

SCHD tracks the Dow Jones U.S. Dividend 100 Index, which includes 100 high-quality, high-yield dividend stocks selected based on factors such as dividend yield and five-year dividend growth rates. This focus on quality and consistency aligns well with my goals.

Currently, SCHD offers a dividend yield of about 3.5% based on the past 12 months — roughly three times higher than the S&P 500’s yield of around 1.1%. That higher yield allows me to generate more income per dollar invested.

Even more important, the fund’s holdings have consistently increased their dividends. Over the past five years, companies within the portfolio have raised payouts at an annual rate of more than 8%. As a result, SCHD has steadily increased the income it distributes to investors, positioning me to collect even more passive income over time.

Attractive Total Returns

Dividend income is only part of the appeal. SCHD also has a strong history of delivering competitive total returns — combining dividend payments with share price appreciation.

Since launching in October 2011, the ETF has produced an average annual return of 12.9%. Over the past five and 10 years, it has generated annualized returns above 10%. It has also started this year on solid footing.

A major factor behind those results is the fund’s emphasis on dividend growth companies. According to research from Ned Davis Research and Hartford Funds, dividend growers in the S&P 500 have delivered an average annual return of 10.2% over the past 50 years. That outperformed companies that kept dividends unchanged (6.8%), those that cut or eliminated dividends (-0.9%), and those that paid no dividends (4.3%).

For me, the combination of strong income generation and a proven record of long-term returns makes SCHD a core holding — and a fund I continue to buy.