Quick Read – Schwab U.S.
Dividend Equity ETF (SCHD) holds 105 stocks but concentrates 42% of assets in the top ten positions, including Texas Instruments (TXN), UnitedHealth (UNH), and Qualcomm (QCOM), which all meet quality screens but create exposure to pharma patent cliffs and energy cycles that the fund’s dividend-history filter cannot anticipate. – SCHD beat the S&P 500 by 12 percentage points year-to-date but trailed SPY by 39 percentage points over five years, making it a quality-screened income vehicle better suited as a component of a diversified portfolio rather than a standalone diversifier. – Most investors buy Schwab U.S
Dividend Equity ETF (NYSEARCA:SCHD) because the fund’s reputation tells them they are buying diversification. SCHD has 105 holdings, screens hard on dividend quality, and charges 0.06%. The retiree who built an income sleeve around SCHD usually has not read the holdings list.
Read the list and the diversification story bends: the top ten positions sit at ~42% of the fund. What SCHD does The fund tracks the Dow Jones U.S. Dividend 100 Index, which screens U.S. companies on a ten-year dividend history, cash flow to total debt, return on equity, dividend yield, and five-year dividend growth.