Evaluating SCHD's 3.25% Yield Against Rising Treasury Rates
SCHD's 3.25% yield Vs. High Treasury Rates: Is The Dividend ETF Still Worth It?
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The Schwab US Dividend Equity ETF (SCHD) has gained over $9.8 billion this year, outperforming the S&P 500 and achieving nearly 20% total returns. Despite government bonds offering higher yields, SCHD's composition of blue-chip companies suggests better long-term growth potential.
- 01SCHD has seen inflows exceeding $9.8 billion this year, with only one week of outflows.
- 02The ETF's total return for the year is nearly 20%, surpassing the S&P 500's 11.25% increase.
- 03Government bonds yield over 4%, compared to SCHD's 3.25% dividend yield.
- 04Over the past five years, SCHD has returned 51%, significantly outpacing government bonds.
- 05Technical indicators suggest SCHD may continue to rise, targeting resistance levels at $35 and $40.
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The Schwab US Dividend Equity ETF (SCHD) has performed exceptionally well this year, accumulating over $9.8 billion in assets and achieving a total return of nearly 20%. This growth comes despite US government bonds offering higher yields, with the two-year Treasury at 4% and the ten-year at 4.437%. While these rates surpass SCHD's 3.25% yield, the ETF's investment in 100 blue-chip companies positions it for better long-term growth. Notably, SCHD's performance over the past five years has yielded 51%, far exceeding the returns from government bonds, which would have generated only $800 in interest on a $10,000 investment. Technical analysis indicates that SCHD may continue to rise, with bullish patterns suggesting potential targets of $35 and $40 in the near term.
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Investors seeking reliable income may find SCHD appealing despite higher government bond yields.
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