Proprietary Data Insights Financial Pros’ Top Dividend ETF Searches in the Last Month
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The Unusual Dividend ETF Financial Pros Picked |
Our Trackstar Data ETF searches don’t change as often or as quickly as the stock data. So, when Schwab’s US Dividend Equity ETF (SCHD) lit up our screens…well…it was odd. Most investors aren’t super interested in dividends right now, given how much treasuries pay. So, why was this lesser-known ETF in a niche strategy so popular? Key Facts About SCHD
First and foremost, Schwab’s Dividend ETF has one of the cheapest expense ratios we’ve seen – far lower than we expected at 0.06%. But then again, that’s what they advertise. The fund tries to mirror the Dow Jones U.S. Dividend 100™ Index, an index focused on the quality and sustainability of dividends. Unsurprisingly, the fund leans toward large-cap blue chip companies, giving it a bias for industrials, healthcare, and financial services over technology companies. Performance With interest rates higher on ‘risk free’ treasury bonds, dividend stocks haven’t performed as well in the last twelve months. Additionally, without high-growth tech companies, the fund’s performance lags the main S&P 500 index.
Competition Financial pros offered up an interesting swath of dividend ETFs. Many of the highest-yielding dividend funds severely underperformed, largely due to sell offs induced by the recent interest rate hikes by the Federal Reserve.
It’s interesting to see how the highest yielding dividends have performed the worst over the last 5-years. You would think that as a stock declines, the yield goes up, and that buying at depressed prices would yield outsized returns. Clearly, that’s not the case.
Our Opinion 10/10 The SCHD is a quality low cost dividend ETF. However, our comparison above delivered some interesting findings. Higher dividend paying perform worse. And the greater the dividend you seek, the worse the performance. SCHD is the best of the group. But it’s worth questioning whether it’s worth seeking a dividend yield strategy instead of a more diversified general equity portfolio. |
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