These are 3 of the most popular dividend ETFs.
Selecting an adequate ETF that aligns with your overall investment strategy is crucial for successfully implementing your investment approach. In this article, I will explain why I would select SCHD if I could only choose one ETF in 2024. I will further demonstrate that including companies such as Apple and Microsoft, in addition to SCHD, can enhance your portfolio's risk-reward profile.
Schwab U.S. Dividend Equity ETF™ is a conservative fund that offers stable growth and dividend growth, not suitable for high-growth or high-yield investors. It is too boring for you. The SCHD ETF holds 103 diversified holdings, with the top sectors being financials, healthcare, and technology. Top 5 holdings are all long-term investment opportunities with consistent dividend growth.
VYM's recent outperformance overlooks SCHD's superior long-term total returns, dividend metrics, and risk-adjusted returns. Interest-rate sensitivity, performance during downturns, and Yield on Cost difference reflect the underlying holdings of SCHD are of higher quality than VYM. Despite VYM being more diversified than SCHD, its risk-adjusted returns and market correlation are worse, showing that adding more holdings is not reducing a dividend investor's risk to compensate for the lower performance of VYM.
The SPDR Portfolio S&P 500 High Dividend ETF simply owns the S&P 500's highest-yielding stocks. The Schwab U.S. Dividend Equity ETF tries to balance company quality and dividend yield, offering more of a growth bent.
Schwab U.S. Dividend Equity ETF is an attractive choice for dividend investors due to its diversification and income potential. The ETF has recently dipped and disappointed year-to-date in terms of performance, creating an opportunity for long-term dividend investors. The ETF focuses on large U.S. companies with attractive dividend prospects, but recent returns have been weaker due to investors chasing high-return opportunities in the technology sector.
I'm selling 60% of SCHD and buying more British American and Enbridge shares for the family charity fund. There are three reasons why this is the right decision for my family, including an instant $5K increase in annual income. BTI and ENB are two of my highest conviction ideas, part of my Fantastic Five —companies I trust with over 35% of my life savings.
The Schwab U.S. Dividend Equity ETF has performed reasonably well over the years. However it has underperformed a similar strategy, which is buying a diversified portfolio of Dividend Aristocrat stocks. The Dividend Aristocrats have beaten the S&P 500 since their inception in 1990, SCHW has underperformed slightly.
I maintain a bearish view on the Schwab U.S. Dividend Equity ETF and believe it will underperform the broader market. The composition of SCHD has changed, with financial and energy stocks becoming a larger portion of the ETF. Alternative ETFs, such as the SPDR S&P 500 ETF Trust and the Invesco QQQ Trust ETF, have outperformed SCHD in terms of total return.
ETFs make it easy to generate passive income from high-yielding dividend stocks. Schwab U.S. Dividend Equity ETF holds 100 high-quality, high-yielding dividend stocks.
U.S. companies paid a record $164.3 billion in dividends during the first quarter. Schwab U.S. Equity Dividend ETF provides instant access to the top 100 dividend-paying stocks.
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.