SCHD’s Top-10 Concentration Sparks Diversification Debate
The Schwab U.S. Dividend Equity ETF (SCHD) now has its top 10 holdings accounting for about 41% of its assets, a concentration higher than the S&P 500’s top-10. SCHD tracks the Dow Jones U.S. Dividend 100 Index, focused on dividend-growth blue chips with a current yield around 3.27% and an expense ratio of 0.06%. Performance shows a five-year total return around 50% (below SPY’s ~79%), reflecting its dividend-screen approach that omits AI-driven tech leaders; over the past year SCHD outperformed SPY (29% vs. 27%). The article suggests using SCHD as an income-focused core and pairing it with DGRO or VYM to add tech exposure without sacrificing the income mandate, while noting the single-stock risk from its top holdings and the drift in weights between reconstitutions.
