SCHD overtakes VIG as biggest dividend ETF
Schwab US Dividend ETF has overtaken Vanguard Dividend Appreciation to become the biggest dividend fund, with more than $20 billion of inflows this year and assets at $113 billion.
The Schwab US Dividend ETF (NYSE: SCHD ) has officially become the biggest dividend fund, overtaking the Vanguard Dividend Appreciation (NYSE: VIG ), which has held the title for years.
This performance coincided with the strong inflows and its performance this year.
SCHD Has Finally Ovrertaken VIG to Become the Biggest Dividend ETF ETF Db data shows that SCHD has has had over $20 billion in inflows this year, bringing its total assets to $113 billion.
At the same time, it has jumped by 27% this year, outperforming the S&P 500 and Nasdaq 100 indices.
VIG, on the other hand, has jumped by 8.1% this year, with its inflows being just $585 million.
Read Also: SCHD to Become King of Dividend ETFs? Aims to Overtake VIG in Key Milestone SCHD has become one of the best-performing ETFs this year, even though it lacks the popular companies that have made headlines during the AI boom.
Its biggest companies are in diverse industries like healthcare, energy, and consumer goods.
They include firms like Merck & Co, Amgen, Abbott Laboratories, Coca-Cola, and Chevron, among others.
In terms of sector composition, technology is only the sixth-largest weighting in SCHD, with the fund concentrated instead in healthcare, consumer staples, energy, and industrials.
That structure has made SCHD attractive to investors looking to hedge their AI exposure, especially as high-profile names like Michael Burry and Ray Dalio have warned that the AI trade is starting to look like a bubble.
Top AI companies have struggled in the past few months.
For example, Nvidia (NASDAQ: NVDA ) stock is trading at $230, down a bit from its all-time high.
Micron (NASDAQ: MU ) ended the week at $1,016 from the all-time high of $1,253, while Sandisk (NASDAQ: SNDK ) is down by 26% from its peak.
The ongoing SCHD performance has led to a drop in its dividend yield drop to 3.14%, lower than what short-term government bonds are paying.
Despite this, the fund has compensated the lower yield with its performance, with the total return this year being 28.9%.
SCHD: Key Technical Risks Have Emerged SCHD chart | Source: TradingView The risk, however, is that the SCHD ETF has formed some notable risky patterns that may lead to a reversal in the near term.
It has formed a small island reversal pattern, which happens after an asset forms a big gap that is followed by a consolidation.
The ETF has also formed a bearish reversal pattern as the Relative Strength Index and the MACD indicators have dropped.
Therefore, there is a risk that it will have a short-term retreat followed by a rebound.
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