markets · · seekingalpha.com
SCHD: Buy It For The AI Jitters, Not The Yield
The Schwab US Dividend Equity ETF remains a Buy, now primarily as a hedge against an AI sell-off rather than for rate-agnostic or energy-driven outperformance. SCHD's recent returns were initially driven by energy holdings, notably ConocoPhillips and Chevron, but energy's future contribution is less reliable as portfolio weights have increased. Rate sensitivity has become more apparent for SCHD, with performance inversely correlated to 10-year yields and exposed to rate shocks similar to the S&P 500.
The Schwab US Dividend Equity ETF remains a Buy, now primarily as a hedge against an AI sell-off rather than for rate-agnostic or energy-driven outperformance. SCHD's recent returns were initially driven by energy holdings, notably ConocoPhillips and Chevron, but energy's future contribution is less reliable as portfolio weights have increased. Rate sensitivity has become more apparent for SCHD, with performance inversely correlated to 10-year yields and exposed to rate shocks similar to the S&P 500.
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