Reassessing US Dividend Stocks - SCHD Underperformance Does Not Mean All US Dividends Failed
đ¨ Correcting a Misconception
Korean investors' sentiment toward US dividend stocks has hit rock bottom. This is due to SCHD's prolonged underperformance.
But SCHD underperforming doesn't mean US high-dividend stocks are underperforming.
đ US Major Dividend ETF Performance Comparison
2025 Year-to-Date Performance
| ETF | Return | Feature |
|---|---|---|
| S&P 500 (SPY) | +15.6% | Benchmark |
| VYM | +8.2% | High dividend (Vanguard) |
| DVY | +10.5% | Dividend select |
| HDV | +7.8% | High dividend (BlackRock) |
| RISE TOP10 | +13.2% | Dow Jones TOP10 |
| SCHD | -0.8% | Underperforming |
Only SCHD is notably underperforming. Other US dividend ETFs show solid returns.
đ¤ Why Only SCHD Underperforms?
1. Methodology Specifics
SCHD isn't just a simple high-dividend ETF:
- Dividend consistency
- Financial health
- Dividend growth rate
- Complex quant screening
This methodology is working against it in current market conditions.
2. Sector Composition Issues
SCHD sector weights:
- Financials: High
- Industrials: High
- Tech: Low
With tech leading markets in 2024-2025, low tech exposure created relative underperformance.
3. Specific Holdings Underperformance
Some top SCHD holdings recorded below-market returns.
đĄ Break the "US Dividends = SCHD" Equation
Because Korean investors overwhelmingly hold SCHD:
"SCHD underperformance = US dividend stock failure"
This misconception has spread.
Reality:
- US dividend ETF performance varies widely
- Multiple alternatives to SCHD exist
- Methodology differences create performance gaps
đ Alternative ETF Performance
High-Dividend Category
- VYM: Vanguard high dividend, stable
- HDV: BlackRock high dividend, defensive
- DVY: Dividend select, aggressive
New Alternatives
- RISE TOP10: Dow Jones high-dividend 10 stocks, simple and powerful
- Tech Dividend ETFs: Growth + dividend simultaneously
đ¯ Need for Portfolio Diversification
Old Approach (Problem)
US Dividends = 100% SCHD
â Single methodology risk
Improved Approach
US Dividends = 50% SCHD + 25% VYM + 25% RISE TOP10
â Methodology diversification, sector diversification
đ° Significance of US Dividend Investing
1. Portfolio Diversification
- Low correlation with Korean stocks
- Balance with growth stocks
2. Dollar Asset Accumulation
- Currency hedge effect
- Global asset allocation
3. Stable Cash Flow
- Quarterly dividends
- Retirement income source
4. Dividend Growth
- US corporate shareholder return culture
- Compounding effect for long-term holders
â ī¸ Investment Checkpoints
-
Understand the Methodology
- Know each ETF's stock selection criteria
- Check alignment with your investment philosophy
-
Review Sector Composition
- Check for sector concentration
- Fit with current market environment
-
Compare Costs
- Total Expense Ratio (TER)
- Trading costs
-
Diversify
- Avoid single ETF concentration
- Diversify by methodology
đ Conclusion
SCHD underperformance = US dividend failure?
â Absolutely not.
US dividend ETF performance varies widely. There's no reason to view all US dividends negatively just because SCHD underperforms.
This is actually a great opportunity to re-examine your portfolio and explore various alternatives.
- Trust SCHD â Keep it
- Need alternatives â Consider RISE TOP10, VYM, etc.
- Both â Parallel investment for diversification
With sentiment toward US dividend investing at lows, this is exactly when you should make decisions based on cold, hard data. đ
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