Schwab U.S. Dividend Equity ETF outperforms Nasdaq 100

The Schwab U.S. Dividend Equity ETF (SCHD) has demonstrated strong performance, rising 27% over the past year and outperforming the Nasdaq 100, which grew by 19% in the same period. This growth is attributed to macroeconomic shifts where investors reduced multiples on large-cap AI-linked companies, benefiting SCHD’s lower technology weighting. Additionally, a significant index reconstitution in March shifted the portfolio toward sectors such as healthcare, consumer goods, and energy, with major holdings including Qualcomm, Texas Instruments, and UnitedHealth.

For investors seeking passive income, the ETF offers a trailing 12-month yield of approximately 3.13%. To generate $500 per month in passive income at current prices, an investment of roughly $191,800 would be required. While the fund has seen a compound annual dividend growth rate of over 11% since 2017, analysts note that purchasing after recent gains may result in lower future yields compared to earlier entries, positioning the fund more as an income reserve than a pure growth substitute.