SCHD ETF Falls to a Crucial Level as Bottoming Signs Emerge
The Schwab US Dividend Equity ETF (NYSE: SCHD ) has lost momentum this month as investors have started moving to US Treasuries, which are offering a higher payout. After hitting a record high of $35 in August, it has dropped to the current $33.21. The ongoing retreat has coincided with the weakness in other top dividend assets. The Vanguard Dividend Appreciation ETF (NYSE: VIG ), which was the biggest dividend fund for a long time, dropped to $237 from the August high of $247. Similarly, top dividend stocks like Realty Income (NYSE: O ) and Energy Transfer (NYSE: ET ) have also dropped. The main reason for the pullback is that US Treasury yields are soaring. The one-month bill is yielding 3.96%, its highest level since December last year. Similarly, the three-month and the ten-year have risen to 4.17% and 5.16%, respectively. Read Also: Realty Income Stock Tumbles as Dividend Giant Hits Rough Patch Technicals Suggest that the SCHD ETF is Bottoming Out On the positive side, SCHD ETF is showing some bottoming signs, suggesting that a rebound is possible. The chart below shows that the fund is slowly nearing the Major S/R Pivot Point of the Murrey Math lines tool at $32. Also, the Rel
The Schwab US Dividend Equity ETF (NYSE: SCHD ) has lost momentum this month as investors have started moving to US Treasuries, which are offering a higher payout. 21. The ongoing retreat has coincided with the weakness in other top dividend assets. The Vanguard Dividend Appreciation ETF (NYSE: VIG ), which was the biggest dividend fund for a long time, dropped to $237 from the August high of $247.
Similarly, top dividend stocks like Realty Income (NYSE: O ) and Energy Transfer (NYSE: ET ) have also dropped. The main reason for the pullback is that US Treasury yields are soaring. 96%, its highest level since December last year. 16%, respectively.
Read Also: Realty Income Stock Tumbles as Dividend Giant Hits Rough Patch Technicals Suggest that the SCHD ETF is Bottoming Out On the positive side, SCHD ETF is showing some bottoming signs, suggesting that a rebound is possible. The chart below shows that the fund is slowly nearing the Major S/R Pivot Point of the Murrey Math lines tool at $32. Also, the Relative Strength Index (RSI) is nearing the oversold level of 30. The ETF is also hovering near the 100-day Exponential Moving Averages (EMA).
Therefore, it is likely that the ETF will bounce back in the coming days or weeks. If this happens, the next important catalyst will be the ultimate resistance level of $34. SCHD ETF chart | Source: TradingView Schwab US Dividend Equity ETF Inflows are Continuing The Schwab US Dividend Equity ETF has key fundamental catalysts that may boost its performance. 2 billion in the last six months.
SCHD is also seen as a good hedge of artificial intelligence (AI) risks, with some analysts like Ray Dalio and Michael Burry warning of a bubble. Unlike other funds, it does not have stakes in big technology companies. Instead, its biggest companies are firms like Coca-Cola, Procter & Gamble, and Merck. 1.
Most importantly, unlike government bonds, SCHD offers growth opportunities. For example, the fund has had a total return of over 56% in the last five years. Bonds have had a smaller gain in this period. Read Also: MSTR in Focus as Michael Saylor Hints at Fresh Bitcoin Purchase Image: Shutterstock