How to Calculate SCHD's Total Return Including Dividends
Master the essential formulas and methods to accurately calculate your SCHD investment performance, including both capital appreciation and dividend income.
Understanding how to calculate total return is crucial for evaluating your SCHD investment performance. Total return includes both capital appreciation (price changes) and dividend income, providing a complete picture of your investment's profitability. This comprehensive guide will teach you multiple calculation methods, from basic formulas to advanced techniques used by professional investors.
Whether you're tracking quarterly performance, planning for retirement, or comparing investment options, mastering these calculations will help you make more informed financial decisions and optimize your dividend investing strategy.
Table of Contents
Basic Total Return Formula
The fundamental formula for calculating total return combines capital appreciation and dividend income into a single percentage figure:
Total Return Formula
Where:
- Ending Value: Current market value of your SCHD shares
- Dividends: Total dividend payments received during the period
- Initial Investment: Original amount invested in SCHD
Quick Example
If you invested $10,000 in SCHD, it's now worth $11,500, and you received $400 in dividends:
SCHD-Specific Calculation Considerations
When calculating SCHD's total return, several ETF-specific factors need consideration:
Quarterly Dividends
SCHD pays dividends quarterly, typically in March, June, September, and December.
Low Expense Ratio
SCHD's 0.06% expense ratio has minimal impact on total return calculations.
Dividend Growth
Historical dividend growth averaging ~10% annually affects long-term calculations.
Price Volatility
SCHD typically exhibits lower volatility than growth-focused ETFs.
SCHD Quarterly Total Return
Calculating Returns with Dividend Reinvestment (DRIP)
When dividends are automatically reinvested, your total return calculation becomes more complex but potentially more rewarding due to compounding effects.
DRIP Total Return Formula
Step-by-step DRIP calculation:
- Track shares acquired through dividend reinvestment each quarter
- Calculate total shares owned at period end
- Multiply total shares by current share price
- Compare to initial investment amount
DRIP Example: $10,000 SCHD Investment
| Quarter | Share Price | Dividend/Share | Shares Owned | New Shares |
|---|---|---|---|---|
| Start | $25.00 | - | 400.00 | - |
| Q1 | $25.50 | $0.25 | 403.92 | 3.92 |
| Q2 | $26.00 | $0.26 | 407.93 | 4.01 |
| Q3 | $26.25 | $0.27 | 412.03 | 4.10 |
| Year End | $26.50 | - | 412.03 | - |
Final Calculation:
Total Value = 412.03 shares × $26.50 = $10,918.80
Total Return = ($10,918.80 - $10,000) / $10,000 × 100 = 9.19%
Time-Weighted vs. Money-Weighted Returns
For investors who make regular contributions to their SCHD position, understanding the difference between time-weighted and money-weighted returns is crucial.
Time-Weighted Return
Measures the compound growth rate of $1 invested at the beginning
Best for comparing fund performance
Money-Weighted Return (IRR)
Accounts for timing and size of cash flows
Best for personal portfolio performance
Practical SCHD Total Return Examples
Example 1: One-Year Hold with Dividends
Scenario: Purchased 1,000 shares of SCHD on January 1st at $24.00 per share
Current Price: $26.50 per share (December 31st)
Dividends Received: $1.04 per share over the year
Initial Investment: 1,000 shares × $24.00 = $24,000
Current Value: 1,000 shares × $26.50 = $26,500
Total Dividends: 1,000 shares × $1.04 = $1,040
Capital Appreciation: $26,500 - $24,000 = $2,500
Total Return: ($2,500 + $1,040) / $24,000 = 14.75%
Example 2: Five-Year Investment with DRIP
Scenario: $50,000 initial investment with automatic dividend reinvestment
Time Period: 5 years
Average Annual Dividend Growth: 10%
| Year | Share Price | Annual Dividend | Shares Owned | Portfolio Value |
|---|---|---|---|---|
| 0 | $22.00 | $0.85 | 2,273 | $50,000 |
| 1 | $23.50 | $0.94 | 2,355 | $55,343 |
| 2 | $25.00 | $1.03 | 2,443 | $61,075 |
| 3 | $26.25 | $1.13 | 2,539 | $66,649 |
| 4 | $27.80 | $1.25 | 2,643 | $73,475 |
| 5 | $29.15 | $1.37 | 2,755 | $80,318 |
Five-Year Total Return:
($80,318 - $50,000) / $50,000 × 100 = 60.64%
Annualized Return: 9.98%
Interactive SCHD Total Return Calculator
Use this calculator to determine your SCHD total return based on your specific investment details:
Investment Details
Calculation Options
SCHD Total Return Visualization
This chart illustrates how total return accumulates over time with and without dividend reinvestment:
Advanced Total Return Calculation Methods
Geometric Mean Return (Multi-Period)
For calculating average returns over multiple periods:
More accurate than arithmetic mean for investment returns
Risk-Adjusted Return (Sharpe Ratio)
Measures return per unit of risk:
Higher ratios indicate better risk-adjusted performance
Tax-Adjusted Total Return
Accounts for tax implications on dividends and capital gains:
Tax considerations:
- Qualified dividends: Taxed at capital gains rates (0%, 15%, or 20%)
- Capital gains: Long-term rates for holdings over 1 year
- Tax-advantaged accounts: No current tax implications
Common Mistakes in Total Return Calculations
Common Mistakes
- • Forgetting to include dividend payments
- • Using closing prices on different days
- • Not accounting for dividend reinvestment
- • Ignoring expense ratio impact
- • Mixing arithmetic and geometric means
- • Not adjusting for stock splits
- • Overlooking tax implications
Best Practices
- • Use consistent measurement dates
- • Track all dividend payments accurately
- • Account for dividend reinvestment
- • Consider tax implications
- • Use time-weighted returns for comparison
- • Adjust for any corporate actions
- • Document your calculation methodology
Mistake Example: Forgetting Dividend Reinvestment
Incorrect Calculation
Only counting dividends as cash received
Return = 8.5% (missing compounding effect)
Correct Calculation
Including shares purchased through DRIP
Return = 12.3% (including reinvestment)
Tools and Resources for SCHD Return Tracking
Spreadsheet Templates
- • Excel total return calculator
- • Google Sheets DRIP tracker
- • Portfolio performance dashboard
Financial Websites
- • Yahoo Finance historical data
- • Morningstar performance metrics
- • ETF.com dividend histories
Mobile Apps
- • Portfolio tracking apps
- • Dividend tracking tools
- • Investment calculators
Mastering SCHD Total Return Calculations
Accurately calculating SCHD's total return is essential for making informed investment decisions and tracking your portfolio's progress toward financial goals. By understanding both basic and advanced calculation methods, you can better evaluate performance, compare investment options, and optimize your dividend investing strategy.
Key Takeaways
- Total return includes both capital appreciation and dividend income - don't calculate one without the other
- Dividend reinvestment significantly impacts long-term returns - track DRIP purchases carefully
- Use time-weighted returns for performance comparison and money-weighted returns for personal tracking
- Consider tax implications when calculating real returns, especially for taxable accounts
- Document your methodology to ensure consistency across different time periods
Frequently Asked Questions
How often should I calculate my SCHD total return?
Most investors calculate total return quarterly (aligned with dividend payments) or annually for tax purposes. Monthly calculations can help track short-term performance trends.
Should I include expense ratios in my total return calculation?
SCHD's expense ratio (0.06%) is already reflected in the ETF's price and dividend payments, so you don't need to subtract it separately. The published NAV already accounts for management fees.
How do I handle SCHD's stock splits in return calculations?
Adjust your share count and cost basis for any stock splits. For example, if SCHD splits 2-for-1, double your shares and halve your cost per share. Most brokerages handle this automatically.
What's the difference between SCHD's NAV and market price for calculations?
Use the market price (what you actually paid/received) for personal return calculations. NAV is useful for understanding the underlying value but doesn't reflect your actual transaction prices.
How do I calculate returns if I made multiple purchases at different prices?
Use dollar-weighted returns (IRR) which account for the timing and size of each purchase. Alternatively, calculate time-weighted returns for each purchase separately, then weight by investment amount.
Should I compare my SCHD returns to the S&P 500 or other dividend ETFs?
Compare to dividend-focused benchmarks like VYM or the S&P 500 Dividend Aristocrats for more relevant context. The S&P 500 serves as a general market benchmark but has different risk/return characteristics.