SPGI - SCHD: Don't Fret About Recent Underperformance

2024-04-29 22:58:25 ET

Summary

• Schwab's U.S. Dividend Equity ETF has underperformed the broader market by nearly 30% in the last two years.
• Despite this underperformance, investors in the fund need not worry if they are in it for the right reasons - SCHD has been delivering on its goals for income investors.
• If you're worried about underperformance, you're probably in the wrong vehicle.
• We reiterate our 'Hold' rating on SCHD; the fund's underlying index and stock selection process should continue to deliver quality dividends to investors.

In case you've been living under a rock, it's been a bad time to be an investor in the Schwab U.S. Dividend Equity ETF ( SCHD ).

After putting in a relatively underwhelming performance over the last two years, many investors are wondering if the ETF is 'broken', as the fund has underperformed the broader market by nearly 30%:

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