The Schwab U.S. Dividend Equity ETF (SCHD) is expected to underperform the S&P 500 following its recent rally and annual reconstitution. The fund's focus on dividend metrics overlooks attractively valued stocks and sustainable growth opportunities. Its heavy weighting in the energy sector and removal of certain stocks during reconstitution reveal flaws that could hurt performance, especially during market rebounds and periods of lower oil prices. Investors should be cautious as SCHD struggles to select dividend payers with compelling valuations.
The SCHD ETF has returned just under 2% in the past month, outperforming the S&P 500 ETF (SPY) by nearly 1%. Year-to-date, about 30 SCHD holdings have more than doubled the returns of SPY, which has returned 9.8%. Additionally, 31 SCHD holdings are t...
The Schwab U.S. Dividend Equity ETF (SCHD) has gained 20% year-to-date, outperforming the S&P 500's 10% rise. SCHD focuses on large-cap companies with strong dividend histories and value metrics, avoiding mega-cap tech stocks that led recent market r...
