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Summary
- SCHD, the Schwab U.S. Dividend Equity ETF, is regarded as the ‘gold standard’ for dividend investing, due to its consistent returns and income generation.
- We attribute recent underperformance to short-term AI trends and not structural issues; SCHD’s robust portfolio construction offers long-term returns.
- The market sell-off due to tariff panic presents a buying opportunity, with SCHD trading down more than 12% from all-time highs.
- We anticipate SCHD could yield 20% annual returns over the next two years or more, making it a strong buy during this dip.
It has been a few months since we last covered SCHD, the Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD).
Often understood as the ‘gold standard‘ of dividend investing, the fund has long won investor interest and capital based on the ETF’s track record of returns, success, and consistent income generation.
In recent years, SCHD has lagged the market somewhat, to the chagrin of some, but this largely reflects – in our view – short-run AI exuberance and a lack of participation in that trend. That is, SCHD’s underperformance doesn’t have to do with any structural issues, it’s simply a result of underinvestment in a few, key stocks that don’t pay significant dividends like Nvidia (NVDA)
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