This Low-Cost ETF Is Now Yielding 3.4%

The S&P 500 averages a dividend yield of 1.8%. That's up from earlier in the year as a bad year on the markets has pushed valuations down, and thus, yields having been on the rise. Investors can collect even higher payouts in dividend-focused exchange-traded funds (ETFs).

Schwab U.S. Dividend Equity ETF (NYSE Arca:SCHD) is a good example as it yields around 3.4% today. It has declined 18% this year, which still isn't as bad as the S&P 500 – it has fallen by 25%.

For income investors, this can be a great fund to invest in today as it looks for stocks that have strong fundamentals. Many of the holdings in the fund are quality dividend stocks that make for good long-term buys. Its top three holdings are Merck & Co (NYSE:MRK), PepsiCo (NASDAQ:PEP), and Pfizer (NYSE:PFE). In total, there are 104 stocks in the fund as of Sept. 30. They average a price-to-earnings ratio of 14 and a price-to-book multiple of 3.3.

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With an expense ratio of just 0.06%, this is a low-cost ETF that can offer investors a safe place to park their money today. This fund provides some good diversification and pays an attractive yield while giving investors the potential to earn some good returns. Over the past five years, the ETF has generated gains of 42%, which are in line with the S&P 500's performance during that time. And after you factor in its above-average dividend, the Schwab U.S. Dividend Equity ETF comes out on top.

Whether you're a long-term investor looking for some strong dividend income or just looking for a place to park your money amid this volatility, this ETF could be a solid option for your portfolio.