2024-03-15 15:30:34 ET
Summary
- What's all the fuss about? Schwab U.S. Dividend Equity ETF™ provides stable income and long-term capital appreciation, but may underperform in terms of growth.
- The SCHD ETF is invested in 104 diversified holdings across various sectors, with the top 5 holdings accounting for 22.4% of the portfolio.
- The top 5 holdings include Broadcom, AbbVie, The Home Depot, Merck, and Texas Instruments, offering a combination of growth and dividend yield.
- You likely will never wake up and find your investment here down double-digits on a random headline.
- You cannot put a price on sleeping well at night.
In this column, we provide a quarterly update on the Schwab U.S. Dividend Equity ETF ( SCHD ). Our opinion? The exchange-traded fund, or ETF, does a great job as it was designed to do, be relatively stable while tracking pretty closely the Dow Jones 100 Dividend Index. That's it. It also offers a growing dividend over time. However for those who chase yield, usually a poor strategy unless you find the right picks, SCHD should be passed over. But it does offer safe income and longer-term capital appreciation. The biggest complaint aside from the lower yield relative to many other income options, is that the growth side of the equation, at best, market performs. And often, it underperforms. That is a fair assessment. However, for those conscious of risk, but looking for a combination of some growth and some dividend growth and yield, SCHD is a sleep-well-at-night option. It is likely due for a breather with the market, but we continue to think it does its job well....
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We're Avoiding Nightmares With SCHD