SCHD: Preventing 'Diworsification' With Quality Dividends
The Schwab U.S. Dividend Equity ETF stayed quite resilient during the recent market selloff due to its focus on high-quality dividend companies, unlike the broader S&P 500. SCHD's holdings trade at a premium valuation, which, we believe, is justified by the stability and competitive advantage of the mature companies in the ETF. The current dividend yield of SCHD is nicely supported by the Free Cash Flow of its constituent companies, with potential for future growth in both dividends and share price.
SCHD: What If A Hard Landing Happens?
A hard landing is more likely now due to the recent rise in the unemployment rate. SCHD has historically demonstrated superior resilience and shorter recovery time compared to the broader market. I expect such superiority to repeat in the next downturn with even more potency given the alarming value-growth gap I'm currently seeing.
Market Volatility Builds The Case Why To Own SCHD
SCHD has faced negative commentary for lacking total returns, slow dividend growth, and relative poor performance compared to SPY and QQQ. Despite criticism, the Fund offers a defensive balance with quality holdings that better withstand market shocks and outperform during economic recessions. Schwab U.S. Dividend Equity ETF is a best-in-class, dividend-oriented ETF that provides a safe haven during turbulent times.
Playing Defense With SCHD
SCHD's net exposure vs the S&P 500 has turned more defensive after 2024's Portfolio Reconstitution. SCHD's relative underweight in technology and semiconductors is favorable in the current environment of heightened recession risks and waning enthusiasm for AI-themed plays. The ETF's relative overweight in banks is favorable, as this sector's growth prospects are attractive as credit quality concerns ease amid strong Q2 FY24 earnings.
SCHD: Easy Alpha
In our previous report, we explained how the Schwab US Dividend Equity ETF is built for winners. In this follow-up report, we explain how SCHD can easily add big alpha to investor returns (especially in volatile markets like we're seeing now). In the conclusion, we explain why many “SCHD haters” are usually barking up the wrong tree, as well as our strong opinion on who should invest.
SCHD And VYM: The Best High-Yield ETFs For 2 Kinds Of Investors
High-yield ETFs can be a wonderful core of retirement portfolios, but you have to be careful because many are risky. SCHD has long been considered the gold standard of high-yield ETFs with 3% yield and 10% to 11% growth. SCHD's portfolio design has grown more conservative today, focusing on slower-growing but more undervalued blue chips.
Should Schwab U.S. Dividend Equity ETF (SCHD) Be on Your Investing Radar?
The Schwab U.S. Dividend Equity ETF (SCHD) was launched on 10/20/2011, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
SCHD: Built For Winners
If you are looking to hit it big—move on, this article is not for you. Schwab U.S. Dividend Equity ETF™ is for “emotionally intelligent” investors that like healthy growing dividends, lower-volatility returns and prudent diversification (especially as top growth stocks still appear precipitously overvalued). After reviewing the SCHD ETF in detail (including the risks), we conclude with our strong opinion on investing.
SCHD Vs. The S&P 500: It's Not Only About Total Return
The ETF SCHD has under-performed the S&P 500 due to the exclusion of technology stocks. History shows underweighting certain sectors can lead to under-performance, however, shares with substantial growth premium can also underperform in the longer term. Investing in dividend-paying stocks can provide stability, even if it means sacrificing the highest possible return.
Understanding The Dividend Investing Model And A Gold Standard Dividend ETF
Today, we explore dividend investing, discussing why they matter to shareholders and the impact on total returns. Dividend growth is driven primarily by earnings growth, but there are other contributing factors, such as share buybacks. We explore the outlook of buybacks for certain dividend-paying companies as repurchases accelerate.
SCHD: Built For Underperformance
SCHD underperformed the S&P 500 due to weak top 10 stock selections and a flawed focus on dividend growth. The ETF heavily invests in stocks with rich multiples and weak underlying fundamentals. SCHD has recently broken resistance, likely leading to a near-term rally that should be sold.
SCHD Vs. VIG: Which One Is Better?
Investors are getting a clearer picture for the 2nd half of 2024 with potential interest rate cuts and insights into the Presidential race. Mega Cap stocks have led the market in 2024, with concerns of a possible near-term pullback prompting diversification strategies. Two popular dividend-focused ETFs, SCHD and VIG, offer different strategies for investors seeking income and growth potential in their portfolios.
