SCHD, which is the ticker symbol for the Schwab US Dividend Equity ETF, may lag behind SPY, the popular SPDR S&P 500 ETF Trust. There are a few reasons why this might happen.
One reason is that SCHD focuses on dividend-paying stocks, which tend to be more defensive and stable. This means that when the market is performing well, growth stocks, which are included in SPY, may outperform dividend stocks.
Additionally, SCHD has a higher weighting in certain sectors, such as consumer staples and utilities, which are traditionally less volatile but may underperform during periods of strong market growth.
Another factor to consider is that SCHD has a lower expense ratio compared to SPY, which can impact its performance relative to the market.
Overall, while SCHD may lag behind SPY in certain market conditions, its focus on dividends and stability can be attractive for investors looking for lower risk in their portfolios.