Schwab U.S. Dividend Equity ETF is an attractive income investment, with a yield exceeding 4%. Recent annual reconstitution resulted in higher energy sector exposure, boosting the ETF's dividend yield. Trading at a slight premium to NAV, SCHD is a top buy on the drop, due to solid 10-year NAV returns and good diversification.
SCHD isn't immune to broad market selloffs, but the ETF has still managed to demonstrate resilience recently. SCHD's reconstitution into more energy and consumer staples offers a mixed outlook, while taking some risks off financial sector plays. In times of uncertainties, SCHD's more defensive exposure into consumer staples might turn out to be right.
SCHD, the Schwab U.S. Dividend Equity ETF, is regarded as the 'gold standard' for dividend investing, due to its consistent returns and income generation. We attribute recent underperformance to short-term AI trends and not structural issues; SCHD's robust portfolio construction offers long-term returns. The market sell-off due to tariff panic presents a buying opportunity, with SCHD trading down more than 12% from all-time highs.
Amid market turmoil, investors often fly to the safety of dividend growth stocks to wait out the storm.
Last week, we woke up to a new reality, with Trump's “Liberation Day” virtually ending decades of free trade. SCHD, thanks to its exposure to mature, dividend-paying companies, is withstanding the market shock better. This year's SCHD's reconstitution was responsible for roughly 20% of holding turnover, including the removal of some heavyweights and major sector shake-up.
Markets are going through a period of volatility that we have not seen since early in the pandemic back in 2020 and, before that, the dot-com crash -- tariffs, concerns around a slower economy, trade wars, and the list goes on. There are plenty of reasons to be concerned right now as an investor, but there are also ways to properly diversify your portfolio to add some stability during this period.
Yesterday's wild rally in the stock market where $5.5 trillion in value following President Trump hitting a 90-day pause on his tariffs, exemplifies the dramatic swings investors have experienced for the past five years.
Within the past five days, the Schwab U.S. Dividend Equity ETF has declined by 12.12%, allowing investors to invest with a higher margin of safety. In this April 2025 edition of my dividend strategy analysis, I will show you how to enhance SCHD's income by supplementing the ETF with April's top 10 high-yield dividend companies. With a Weighted Average Dividend Yield of 5.06%, this $100,000 dividend portfolio offers investors a superior capacity to produce dividend income in addition to an optimized risk-reward profile.
Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Schwab U.S. Dividend Equity ETF (SCHD) is a passively managed exchange traded fund launched on 10/20/2011.
Schwab U.S. Dividend Equity ETF offers high diversification, capital appreciation, and dividend growth, making it ideal for passive income investors amid market volatility. Recent rebalancing added 20 new stocks, focusing on cyclical sectors like Energy and Financials, enhancing SCHD's pro-growth profile. Low exposure to technology (7.8%) makes SCHD a potential hedge against tech market downturns, appealing to investors seeking portfolio stabilization.
SCHD offers stability and income appeal with a 4.1% dividend yield, significantly higher than SPY's 1.4%, and a lower Beta score of 0.625. SCHD's diversified portfolio focuses on defensive sectors like Energy, Healthcare, and Consumer Staples, providing downside protection and upside potential. SCHD's holdings, like Bristol Myers and Verizon, are undervalued, offering built-in capital appreciation potential alongside strong historical dividend growth rates.
The 4-factor dividend growth portfolio is a strategy that leverages the stock selection process of Schwab U.S. Dividend Equity ETF, with a few minor twists. The portfolio had an excellent start to 2025, outperforming the S&P 500 by nearly 7% year-to-date. Since its inception, the portfolio has generated a CAGR of 16.97%, and is outperforming SCHD by 7.35%.