SCHD’s Dividend Quality Filter Now Concentrates 42 Percent of Your Money in Just Ten Stocks

2 hours ago 3

Omor Ibne Ehsan

Tue, May 26, 2026 astatine 8:50 AM CDT 5 min read

Quick Read

Schwab U.S. Dividend Equity ETF (SCHD) holds 105 stocks but concentrates 42% of assets successful the apical 10 positions, including Texas Instruments (TXN), UnitedHealth (UNH), and Qualcomm (QCOM), which each conscionable prime screens but make vulnerability to pharma patent cliffs and vigor cycles that the fund’s dividend-history filter cannot anticipate.
SCHD bushed the S&P 500 by 12 percent points year-to-date but trailed SPY by 39 percent points implicit 5 years, making it a quality-screened income conveyance amended suited arsenic a constituent of a diversified portfolio alternatively than a standalone diversifier.

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Most investors bargain Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) due to the fact that the fund's estimation tells them they are buying diversification. SCHD has 105 holdings, screens hard connected dividend quality, and charges 0.06%.

The retiree who built an income sleeve astir SCHD usually has not work the holdings list. Read the database and the diversification communicative bends: the apical 10 positions beryllium astatine ~42% of the fund.

What SCHD does

The money tracks the Dow Jones U.S. Dividend 100 Index, which screens U.S. companies connected a ten-year dividend history, currency travel to full debt, instrumentality connected equity, dividend yield, and five-year dividend growth. It reconstitutes each March and rebalances quarterly. SCHD is truthful a quality-tilted dividend handbasket built astir mature businesses paying mean qualified dividends retired of operating currency flow.

The surface does its occupation astatine the information level. Top holdings include Texas Instruments (NASDAQ:TXN), UnitedHealth (NYSE:UNH), and Qualcomm (NASDAQ:QCOM). Each sanction passes the prime filter. The aggregation is what the brochure does not advertise.

Does it deliver?

This year, yes. SCHD is up 21% year-to-date against 9% for the S&P 500, helped by vigor doing existent work. Crude went from $60 successful January to ~$90 today, and Chevron (NYSE:CVX) rode that to a 47% one-year gain. Stretch the model and the representation inverts. Over 5 years SCHD has returned 53% successful terms against 92% for SPY.