The Schwab US Dividend ETF (SCHD) has continued its strong rally this year, reaching a record high of $35.30, up 27% from where it started the year. This rally has allowed the fund to outperform popular indices such as the Dow Jones, Nasdaq 100, and S&P 500.
The Schwab US Dividend Equity ETF outperformed expectations, rising 27% YTD, but caution is warranted going forward. SCHD's dividend growth has stagnated, with H1 year-over-year growth at just 0.08%, now trailing inflation. Fixed income now offers higher yields than SCHD, reducing its relative appeal for income-focused investors amid rising rates.
SCHD just delivered a return most dividend investors spend a decade waiting for, and that success created a problem nobody predicted.
A $10,000 stake in a single dividend ETF at launch now generates a level of annual income that no fresh investment in any comparable fund can realistically match today, and the structural reason why reveals exactly how dividend compounding actually
Retirees face a challenging trade-off: higher-yielding assets sacrifice growth or add risk, while core dividend ETFs like SCHD now yield only ~3%. Relying solely on high-yield ETFs (PFF, HYG, JEPQ) exposes portfolios to credit risk, limited income growth, or capped upside, complicating sustainable income generation. A core & satellite approach—anchoring with SCHD-like holdings and selectively adding midstream (AMLP) and BDCs (BIZD) can enhance yield while managing risk.
Schwab U.S. Dividend Equity ETF has delivered a stunning 31% total return over the past year, outperforming my already bullish expectations and the S&P 500. SCHD's valuation at a 13.5x P/E remains well below the S&P 500, with sector allocations favoring healthcare, consumer defensive, and energy over technology. Current momentum is strong, but SCHD's dividend yield has dropped below 3%, and the risk-reward is less appealing as the valuation gap narrows.
Most investors reach for TIPS or commodities when inflation starts eroding their savings, but two overlooked asset classes have quietly outpaced rising prices for decades.
Investors chasing higher payouts than what typical U.S. blue chips deliver keep landing on the same benchmark: the Schwab U.S.
Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider the Schwab U.S. Dividend Equity ETF (SCHD), a passively managed exchange traded fund launched on October 20, 2011.
Retirees searching for quarterly income often choose between Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) and Vanguard Real Estate ETF (NYSEARCA:VNQ).
The Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) has become the default answer for dividend investors.
Schwab U.S. Dividend Equity ETF (SCHD) defied expectations despite bearish macro conditions. SCHD's top holdings—ABT, MRK, and AMGN— have delivered outsized gains, especially following blockbuster news. Dividend growth and stable income remain core strengths for SCHD, making waiting for a deeper pullback costly due to missed distributions.