Summary
- Schwab U.S. Dividend Equity has severely underperformed over the past year due to its outsized focus on high-yielding cyclical stocks rather than historically safer, defensive yield or growth choices.
- The ETF’s portfolio is heavily weighted toward sectors that usually …
Summary
- Schwab U.S. Dividend Equity has severely underperformed over the past year due to its outsized focus on high-yielding cyclical stocks rather than historically safer, defensive yield or growth choices.
- The ETF’s portfolio is heavily weighted toward sectors that usually struggle during market downturns, making it less resilient in recessions.
- SCHD has not been stress-tested in a major recession since its 2011 inception, raising concerns about future performance.
- I believe SCHD will be a smarter investment after a significant market correction, not as a countertrend or defensive holding today.
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I wrote a bearish article in May here, explaining why I had no interest in owning the popular Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD). Believe it or not, this product has been a chronic
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