The Schwab US Dividend Equity ETF (NYSEARCA:SCHD) is a popular dividend ETF that has gained a reputation for being one of the best in its class. While it is not a bad fund to own, there are some risks and misconceptions surrounding its performance.
It is important to recognize SCHD for what it is – a decent option for those looking for a combination of yield, valuation, and total return growth potential. However, it is not significantly ahead of its peers on a forward-looking basis. It is important to understand that past performance does not guarantee future success.
While SCHD has seen significant asset growth, it is crucial to remember that portfolios are not immune to market downturns. It is essential to have some form of downside protection when investing in dividend ETFs.
Despite its popularity, SCHD has not always outperformed its peers. It is important for investors to be aware of its performance history and to understand that dividend stocks are still stocks, subject to market volatility.
Overall, SCHD is a competitive option in its peer group, but it is not a “Superman” ETF. It is essential to approach investing with a focus on risk management and not solely on past performance.