SCHD Will Continue To Be A Bitter Disappointment... Unless The World Falls Apart

2025-04-15 10:15:36 ET

Summary

• SCHD's returns are suboptimal compared to broader market indices over the long term, despite occasional short-term outperformance.
• The high dividend yield and stability of SCHD's underlying companies do not justify its overall poor performance.
• A portfolio of five large, diverse companies offers better returns and yield than SCHD.
• SCHD's changing composition, especially its increasing financials exposure, could impact performance during economic downturns.

Those who follow my work closely likely know by now that I am not a fan of the Schwab U.S. Dividend Equity ETF ( SCHD ). At the end of the day, I believe that the best investing approach for the vast majority of investors is to capture the best returns. I also understand the appeal of high dividend yielding opportunities. And that is something that has historically drawn investors to SCHD. However, even if that is your objective over capturing a stronger total return, there are better ways than by buying SCHD....

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