SCHD ETF: $28.41 Price, 3.67% Yield And The Real Story After Broadcom’s Exit

DLN Versus SCHD: Same Dividend Philosophy, Very Different Growth Engine

Bringing WisdomTree’s U.S. LargeCap Dividend Fund (DLN) into the comparison shows how another ETF implements a similar philosophy with a structurally different bias. SCHD selects roughly 100 stocks based on dividend quality, balance sheet strength and growth of payouts, then caps positions but still ends up with 40%+ in the top 10. DLN owns ~300 names and weights them by absolute dividend dollars paid, not yield or pure market cap. That methodology naturally gravitates toward the largest cash-gushing platforms in the market – think mega-cap tech and integrated energy – but spreads weight more broadly. There are only about 31 overlapping stocks between SCHD and DLN; those 31 names represent roughly 75-80% of SCHD’s assets but just 15-20% of DLN’s. Top-10 concentration in DLN is close to 25% versus 40%+ for SCHD. The result: DLN behaves like a dividend-aware version of a growth index, while SCHD remains a purer yield-quality factor play.

Sector Tilts, AI And Why DLN Has Taken The Lead Since 2024

Sector allocation explains why DLN has outperformed SCHD since the 2024 AI melt-up. DLN runs close to 40% combined in technology and financials, whereas SCHD sits nearer 20% in those sectors and leans much harder into traditional high-yield pockets like energy, consumer defensives and healthcare – around 55% combined, versus about 30% for DLN. DLN’s top positions are cash-rich mega-caps that dominate AI infrastructure and digital platforms, but still pay dividends: think of it as a softer, more income-focused SPY or QQQ. During 2020’s crash, that tilt hurt DLN more than SCHD, but in the 2022 rate-and-earnings scare both funds drew down roughly 15% while SPY dropped closer to 24%. Since 2024, as AI spending and platform earnings powered higher, DLN’s tech exposure drove better upside capture without a worse drawdown profile. SCHD’s heavier energy and defensive tilts protected it in late-cycle risk-off periods but left it lagging in explosive growth phases. The conclusion: if an investor wants dividend discipline plus more direct participation in secular AI earnings growth, DLN deserves a meaningful allocation alongside or instead of SCHD.

Rates, Yield Gap And 2026 Rebalancing Dynamics For SCHD

The macro backdrop now tilts in SCHD’s favour again. The Fed has already cut rates into the 3.50–3.75% range, inflation printed around 2.7% in November, and the path for 2026 is further easing. A reasonable base case is three to four cuts, more aggressive than consensus expectations of one to two moves. As policy rates fall, the yield gap between dividend ETFs and risk-free cash widens again. A 3.67% equity yield on SCHD is not particularly exciting when money-market funds pay similar levels; it becomes much more appealing when cash yields drift down toward 2–2.5% while SCHD continues to grow its payouts. That is the core tailwind. At the same time, falling rates compress net interest margins in banks and structurally reduce earnings leverage for rate-sensitive financials. Energy faces its own headwind: crude near $60 a barrel implies softer earnings than in the 2022–2023 spike era, and political moves that unlock more Venezuelan supply would add further pressure. Given this, it is rational to expect SCHD’s March 2026 rebalance to reduce its roughly 10% financials weight and about 20% energy exposure and lean more into defensive yield sectors like healthcare, telecom and utilities. If that shift occurs, SCHD becomes a cleaner “falling-rate beneficiary”: a diversified book of solid dividend payers whose cash flows are less directly hit by lower rates but whose relative yield becomes more attractive as bonds roll down.

Dividend Growth Track Record: Where SCHD Still Dominates Rivals

Yield today is only half the story; dividend growth is the other half, and here SCHD is still the benchmark in its peer group. Over the last decade it has materially outpaced VYM and HDV on distribution growth, despite similar or higher current yields. That compounding matters. A portfolio that starts with a 3.5–4.0% yield and grows payouts faster than inflation gradually becomes self-funding: you can raise your withdrawal rate without eroding capital as fast as you would in a lower-growth product. This is the piece most investors underappreciate when they obsess over one or two years of price underperformance versus VOO or DLN. On NAV, SCHD has kept pace with diversified dividend peers while delivering superior dividend growth; relative to HDV it simply looks superior on every axis. The loss of Broadcom hurts one period of price charts; it does not erase a decade-long record of consistent, above-market income growth.

Risk Map: When SCHD Underperforms And What To Watch From Here

The main situations where SCHD underperforms are clear. First, explosive growth phases led by non-dividend or low-yield tech, like 2020–2021 and parts of 2024–2025: funds like DLN, VOO or QQQ will win on price. Second, when one of its large top-10 positions is forced out or structurally repriced lower, as happened with AVGO being dropped and as could happen in future with names like LMT if policy risk or yield metrics change. Third, if the Fed unexpectedly pauses rate cuts or inflation re-accelerates, keeping short-rates elevated: in that world the yield gap between SCHD and cash stays narrow, making the ETF less compelling for pure income allocators. The watch-list for a SCHD investor is therefore short and concrete: sector weights in the March rebalance, top-10 concentration and any idiosyncratic blow-ups, the pace of Fed easing relative to expectations, and whether dividend growth continues to outrun inflation. As long as distributions keep climbing and the Fed stays on a cutting path, the structural case holds.

Verdict On SCHD At ~$28.4 And 3.67% Yield: Buy, Sell Or Hold?

Putting the pieces together, at around $28.41 and a yield just under 3.7%, I see SCHD as a Buy for income-focused investors and a neutral / market-perform vehicle versus pure growth benchmarks like VOO. The positives are straightforward: a decade-long record of strong dividend growth, a current yield that should become more attractive as rates fall, a likely 2026 rebalance that rotates away from vulnerable financials and energy into more defensive yield sectors, and a still-reasonable price near the top of the 52-week range but not stretched versus its own history. The negatives are equally clear: structural concentration risk, the permanent loss of AVGO-type upside, and competition from DLN and VOO for investors who care more about total return than about cash flow. My blunt view: if your priority is maximum long-run capital appreciation, you stay primarily in VOO and perhaps use DLN as your dividend tilt. If your objective is a growing income stream with equity-like growth and you can live with some concentration risk, SCHD at current levels is a justified Buy and deserves a central role in the income sleeve of a long-term portfolio.

That's TradingNEWS