The Secret to SCHD Success that No One is Talking About

[@mattderron]

What do you think? Is SCHD going to continue to outperform going forward or is it time to look somewhere else??

[@charlielipthratt7291]

Nothing goes straight up forever. If someone is jumping ship because of the last year or two, maybe they don't know why they invested in it. Maybe they just followed the recommendation of a KZbin video that said it was hot or the king. That decision making creates unrealistic expectations. After investing through 2000 and 2008 downturns, you gain perspective on chasing things. You explained it well. SCHD is following its strategy. It's worked well in the past. They just updated their stock mix in March and we'll see how it goes. It might take a while with the current economic situation we're in. Most of the stock market isn't flying high. The bigger stocks that are running up now don't need to worry about borrowing at these high interest rates. Value companies might take a while to really catch up. Now is probably a good time to keep buying more and dollar cost average into a lot of SCHD shares over the next 5 to 10 years. That being said, people should be buying growth too. Just not hand over fist at these higher values. Thanks for the great video.

[@mattderron]

You make a good point here - most people wouldn't be prepared for a relatively flat 5 or 10 year period. That would be rough. That's why understanding what we're invested in and why is so critical

[@Dividendflywheel]

Matt; investor psychology leads them to pile into specific stocks, mutual funds or ETFs “after” a period of superior performance. • In the case of SCHD it was a decade. Then these same investors dump their position as performance reverts to the mean. • This “chasing of performance” is very detrimental to longterm performance. • Any way, I don’t have a crystal ball to predict SCHD future performance. I do know it’s security selection criteria matches what I need for a portion of my total stock portfolio. Hence I own SCHD along with VYM, DGRO & PRDGX • I am new to your channel and will systematically binge all your videos. • I am curious if you have (or will) create videos on “reversion to the mean”. When John Bogle explained this concept it was an eye-opener for me • Thanks for great content

[@mattderron]

You're absolutely right about mean reversion. I will definitely put it on my list. I talked about it briefly in a stock analysis video about Verizon that will be out next week. Basically that it's underperformed for 30 years compared to the broader market, but it's probably a bit undervalued right now so if you're interested in a shorter term swing / mean reversion trade then there's probably something there. It's a good topic to talk about because everyone experiences it - buying the top and then selling the bottom because you're basing your decision on market performance only as opposed to strategy / fundamentals.

[@jwa7378]

I'm outperforming the S&P500 on my own. I have some tech and some industrials. You literally just follow the big boys. ETFs are too passive for me.

[@TheBassicBassist]

Your realistic unexaggerated explanation of the cult favorite SCHD is refreshing. Hoping this video blows up for you.

[@TheBassicBassist]

I buy both SCHD and VIG. I just pretend like the top 25% that VIG cuts out are represented by SCHD. Thought about switching from VIG to DGRO but VIG has a higher dividend CAGR according to Seeking Alpha.

[@mattderron]

Thank you I appreciate it. Also I never thought about that approach (25% VIG cut = SCHD) that's super interesting, love it!

[@Baygulll]

I love your presentation style and the way you analyzed these different ETFs. Very straightforward and well thought out information. Great vid!

[@mattderron]

Thank you!

[@lecorb8825]

Matt, great video, I appreciate your well considered comprehensive coverage of the content and presentation.

[@Crockerfeller]

Really love your content! This video was super informative. Really enjoyed the review of the methodologies. Thank you for the effort your put into these vids!

[@mattderron]

That's awesome, thank you!

[@charlielipthratt7291]

You did a great job here. This is the most well thought out discussion on SCHD and and great comparison with other "competitors." Thanks for making it.

[@mattderron]

Thank you!

[@bruceanderson8179]

I had a fairly large exposure with SCHD. During my semi annual rebalancing the first week of July I was disappointed SCHD was lagging the S&P by a significant amount so I looked deeper into the ETF. Forty percent of SCHD was concentrated in ten companies which was a concentration too high for me. In addition, being an investor who favors dividend aristocrats when it comes to my individual stock portfolio, I already had exposure to 1/3 of SCHD's top ten holdings. I ended up liquidating all SCHD holdings and distributing them to SCHX (new position), DGRO (an existing position), SCHF (an existing but underweight postion) and rounded out some positions in individual stock holdings. I know I've sacrificed some dividends here but I prefer the broader diversification of the other ETFs and the growth opportunities specifically with SCHX and SCHF. The analysis provided is great in terms of teaching people how to delve into the construction parameters of ETFs. Hopefully for those investing in SCHD will see it turn around.

[@mattderron]

That's awesome - understanding what companies we're concentrated in with these ETFs is so important IMO. It's too easy to just blindly invest in the "idea" and not really know what's underneath.

[@bruceanderson8179]

@@mattderron Just for giggles I used a tool I saw in one of your videos to backtest SPY, SCHD, and DGRO with dividends reinvested. Each ETF was the only investment in one of 3 portfolios. I was surprised the difference in the growth of $10k between the 3 over the last 8 years was minimal as about $1k separated the highest and lowest performer. And, at one point, April 2023, the 3 ETFs were, separated by $100. Over the 8 years there are points of convergence and divergence but they all look to correlate closely to one another although it's been less evident in the last 12 months. Just thought I'd pass on this observation as I found it interesting.

[@smollbutbig]

This is one of tue best detailed evaluation of ETFs i have ever listned to. Please keep on doing that. You dont know how much value it has to new investors. Thanks!

[@mattderron]

Thank you so much for that, I appreciate it!

[@jayyoung4615]

Great comments. My portfolio holds around 60% SCHD, 6% VBR (small cap value), 6% VOE (mid cap value), 10% SCHY (SCHD's International cousin utilizing the same quality screens but for international companies), and 20% IVV (S&P 500). As a portfolio, it generates around 3.1% current yield, .80 Beta, 9% dividend growth, and a nice sector diversification profile. I did a deep dive on DGRO at some point in the past and recognized, as you did, that it had much more significant overlap with IVV than it did with SCHD. I considered carving a bit of my IVV allocation out to allow for some small addition of DGRO thinking it would offer similar total returns but impact my total portfolio with a slight lift in dividend yield and a slight reduction in beta (portfolio volatility). I never did it though because it just seemed more complicated than beneficial. I like my 5 ETF portfolio. Enjoyed the video!

[@mattderron]

That's awesome thank you! I love your portfolio breakdown!

[@kmoliere504]

This is by far the best methodology comparison video I've run across on popular dividend etfs. Thanks so much for posting this.

[@mattderron]

No worries. Thanks!

[@dreamquotes]

I love SCHD, I really think the way to go is to add the growth separately, like an XLK or individual stocks like AAPL and MSFT while keeping SCHD as the core holding

[@mattderron]

This is currently what I'm doing. Allows me to have a solid base of dividend growers and then research other stocks I'm interested in that may be in tech or other sectors. Or even just different dividend growers that aren't in SCHD or don't have a large weighting.

[@mattderron]

Yeah, I'm pretty sure that'll just be temporary

[@rafiamirali9188]

@@mattderron IDK man, we are heading to mean regression. SCHD is full of overvalued "consumer staple" stocks. Top 2 holdings are KO and PEP which are bloated af. I think SCHD performs better in downturns, like we saw in 22', but will hugely underperform in booms like 23'. If you don't need the extra income from higher yield, I think something like vti, voo, or even qqq is a way better long term hold. We shall see. I may be wrong.

[@mattderron]

I think there’s a lot of truth in what you’re saying. My video for Wednesday is going to touch on the SCHD + tech combo and why it’s better than either one by themselves. But it’s basically because of the reasons you just mentioned

[@Javalipapere]

I agree. That’s what we do is buy AAPL Msft Goog separately

[@jdwilsun]

Thank you for a great chat!

[@gaurav1987pal]

Quality content for such a small channel. Keep going, and your channel will be huge one day!!! Now just to give my two cents about the topic: i like the fact that SCHD doesnt house MSFT and AAPL. I like my investments to perform a specific function in my portfolio, when i invest in a dividend growth ETF I want my dividend growth to match business performance, becoz returning capital to shareholders is a primary function of such ETF. I dont like companies growing bottom line 15% and growing dividend by just 10%. I plan to hold SCHD for life and it provides a good supplement for my growth stocks.

[@mattderron]

Thank you I appreciate it! 100% agree with you on liking SCHD's makeup. My video for today actually talks about matching it with a growth / tech ETF if you want exposure to those companies.

[@jameszeng2666]

SCHD is more of a substitute to bounds in my portfolio ... and it works well with QQQ(M) if you are in a 2-fund portfolio (or VOO if you want to do 3 funds)

[@johnmcquaid7524]

I am here to learn about Visa; sticking around to learn about ETFs. Excellent detailed & understandable video. Thank-you!

[@mattderron]

I will likely do a Visa update after they announce earnings this afternoon

[@johnpalcon7570]

When i saw the trend of peopel finding alternatives to SCHD, i knew thats when i wanna start buying into it🔥

[@donjohnson4368]

Thank you for this upload from London UK

[@byteme0000]

There are plenty of ETFs that include companies like Microsoft, Apple, Google, etc. They're a dime a dozen. So, even if you're not primarily (or at all) a dividend stock investor, you can think of SCHD as an excellent value-based ETF. The rigorous process for determining which companies to allow in the ETF's list of holdings results in your owning a solid list of comparatively undervalued companies--they're typically companies that make great stuff that everyone needs, but they're not the exciting, flashy, high-flying tech companies (for example). And if you don't like some of the companies that comprise SCHD's holdings now--for example, I don't care for Verizon and Ford--rest assured that SCHD reconstitutes itself annually in early March. If some companies are not making the grade, they're out. Finally, most folks don't do the math, but there is a huge benefit to owning a pile of stocks that pay dividends that increase steadily every year; in that regard, SCHD is tough to beat.

[@spoonwinnipeg2021]

This is the first video of yours that I've seen. I like your explanatory style. I wonder if you or one of your video watchers has an idea of a Canadian etf that uses a similar methodology to SCHD's.

[@mattderron]

Thank you! I'm not familiar with a Canadian alternative, but maybe somebody in the comments will know!

[@1337b3nnyvav00m]

Love my large cap strategy of 50% SCHG and 50% SCHD. Instead of exposing myself to the entire S&P 500 I expose myself to 250 companies with high growth potential and 100 value oriented companies.

[@Metal_Stacking]

Schd is underperforming the overvalued sp500 due to 5 companies pulling the whole sp500 to overvalued territory. When it all balances back out you will be happy you own schd imo...

[@mattderron]

100% agree

[@Metal_Stacking]

@mattderron I was reading in June that the sp500 without the 6 companies would be negative returns with dividends ytd. And if you owned the 6 companies you would be up 48% ytd.

[@mattderron]

Yup big tech has made all the returns this year

[@Metal_Stacking]

@@mattderron we know what goes into a bubble eventually pops. Those big 6 will fall hard in any market downturn.

[@brianmcg321]

That’s how indexes work

[@markriley5931]

Matt, Outstanding comparison and well-researched explanation of dividend funds. Very helpful as I rebalance my holdings in retirement. Many thanks.

[@mattderron]

Thank you, I appreciate it. Glad it was helpful!

[@JonCooper86]

I'm trying this : 33% fidelity 500 33% FTEC 33% SCHD put in as much as possible and within 10-20 years it'll snowball into a massive portfolio

[@mattderron]

Nice, probably a bit of overlap with FTEC and 500 for the top companies but ultimately if you believe in tech long-term (probably a good bet) that's totally fine. Looks like an awesome plan!

[@aristotleaquino3067]

If you want less volatility and less growth then buy this(SCHD). If you want more growth but more volatility then by QQQ or VGT. Its pretty basic. The hard part is how you emotionally react when there is volatility (a significant drop in the market). If you freak out during drops then buy SCHD. If you lean in and buy more during drops then go with QQQ or VGT. Also if you are young put some in QQQ or VGT as you get older migrate more and more of your money to SCHD.

[@christophertamez7474]

Amazing breakdown! I’m fairly new into my investing journey. Only about 6k invested with approx 2.5k in schd, but dollar cost averaging daily $15 ($71 avg cost per share) I’m no finance expert, and have taught myself what I do know strictly online. I’m 27 and wish I started investing even earlier. I can’t wait to see my SCHD dividends snowball into something that could hopefully sustain me. Excellent video! Subbed! (Side note - what are your thoughts on JEPI?)

[@mattderron]

Thanks - in terms of JEPI I think it’s really about what your goals and time horizon are. I’m not clear on the long term value of these covered call / options ETFs since they only have a short history. People get excited about the yield but my personal preference is to focus on long term price appreciation and dividends over needing an options strategy to be consistently good over a long period. Just my opinion though.

[@JNHEscapes]

Good video and deep dive. 10% of my portfolio (roughly 300k) is in schd and has done quite well. I bought it when it dipped below $70. I chose it over the VYM mainly because of allocation. People typically don’t realize how allocations are so important with etf’s. I own more than a million of the voo so I already own appl and msft and would prefer a diversification like schd that actually does not have those two. Some etf’s like vcr or vug are just way overweight a few stocks. I watch allocation carefully. What I don’t understand about youtube is why so many people make videos about buying individual stocks. I would NEVER recommend the average investor buy individual stocks. These etf’s we’re discussing are perfect for 80% of the population. Even with my size portfolio I have very few individual stocks. I do not want to wake up one morning to a scandal, or better mouse trap taking out 10% of my portfolio. Most of my money is in voo, schd, vt and I did replace my bond etf’s with jepi for the income. That’s all anybody needs to stay wealthy.

[@mattderron]

Thanks. Agree that for most people ETFs make the most sense. I do love individual stocks too though lol

[@notnoternexto]

As someone who works in this industry this is just my two cents, your allocation to VOO and VT are very much correlated, you might as well just own one of them and then diversify with an international etf, a factor like (quality or momentum) or size based etf like (small cap/mid cap ) instead if you haven't already. Also JEPI has grown in popularity but it has its flaws, in a sharp market decline like the Covid drop, JEPI will not only get crushed like the rest of the market but will take much longer to recover due to their covered call strategy leaving a lot of gains on the table. JEPI came to market strategically after the market dropped in 2020, the other thing with JEPI is that a lot of their income comes from the premium sold from calls and the volatility in stocks and option premiums have declined which will lead to a declining income. JEPI falls in the Alternative category so replacing bonds with it is not ideal. Bonds serve a purpose, which is to sell bonds to buy stocks or to withdraw for expenses during declining markets, ie: (covid crash, financial crisis). ETF's tracking the 1-3 yr treasury index would allow your portfolio to have lower beta (volatility) and serve as your bond allocation, and now yields are up so you are getting paid in comparison to years ago.

[@JNHEscapes]

@@notnoternexto agree 100% my biggest problem seems to be between over-allocating to the voo and finding a suitable diversification addition. Vti, vt, voo and others all seem to be so close. What is your thought on having just two or three funds total? Schd, voo, maybe jepi even though it’s flawed it could be the “fixed income” portion. Just thinking out loud. At one time I was 75% in the voo, but that felt right and wrong at the same time ha! Thanks for the comments.

[@cinamatics]

@@JNHEscapes Great advice! Curious because I own JEPI myself, what about it do you believe is "flawed"?

[@JNHEscapes]

@@cinamatics Not sure honestly. Could be like the xyld and qyld where capital depreciation occurs over the long term where the dividends do not cover the loss on the principal. However, everything I have read claims jepi is trying to make 6-8% a year consistently so as long as the principal moved a little in the up direction and we’re getting the dividend then great, but if you look at long term charts for xyld and qyld as examples the principal has done nothing but erode. That’s my concern.

[@michaelswami]

100% agree with you. I own SCHD for precisely this reason. Also own it’s sister company, SCHY.

[@ZaneDevon]

Great breakdown! This is top tier content. I'm snowballing my SCHD position exclusively with dividends from my total holdings. Very much looking forward to seeing it grow

[@mattderron]

Thank you! Watching it grow is the best part for sure

[@RecoveredPennychaser]

So am I.

[@FELiPES101]

My etf holdings are 25% QQQ/ 75% SCHD by cost basis...I get the magic 7 exposure from qqq but I'm not super overweight in them, but I also get the dividend growth which is my investment style.

[@mattderron]

Nice! Awesome combo

[@hernanecomh]

subscriber number 930! Awesome content, thanks.

[@mattderron]

Nice, thank you!

[@tvlookplay]

Great video im currently 90/ 10 on schd and dgro. In my taxable account. Gonna stick with it for the long term. I watch these videos to help stay the course.

[@mattderron]

That's awesome, I actually love dividend payers in taxable accounts, it sounds bad but having an income stream building that you can use any time can be worth the extra tax hit depending on what your goals are

[@Deadeye313]

​@@mattderronThat's why I've got SCHD in my taxable account instead of dumping more in my Roth. My Roth is up 15.5% this year but that money is locked till I'm 59.5. SCHD lets me put a little extra in the markets, but if I absolutely need that money, I can take it out for emergencies.

[@mattderron]

At least with the Roth you can take out any contributions without penalty (just not earnings) - but I agree that there is something different about having a dividend income stream with no restrictions. I wish I would've done that more before I left my corporate job

[@timfetner8029]

Well done Matt. SCHD is one of my dominant holdings right now and has been for a while. Outstanding analysis and explanation - keep up the great work.

[@mattderron]

Thanks! SCHD is awesome, have it as a decent part of my portfolio as well.

[@darren9895]

Great analysis Matt, the methodology is the most important criteria for selecting ETFs for sure. Love your channel, keep up the good work. Would you be able do a video on the DGRW wisdom tree index methodology? All other ETFs are pretty straightforward, however I find wisdom trees ones hard to understand in their PDF.

[@mattderron]

Thank you! I will definitely put that on my list, hadn’t heard about that before

[@darren9895]

@@mattderron Legend!

[@ChosoDFK]

Dude quality video and info! Thank you for your effort. Subscribed and Secret Subscribed

[@mattderron]

Thank you!

[@JParty22]

Great video. Been loading up on SCHD this year. Love this ETF!

[@twoking10]

Just found Matt today. WELL RESEARCHED ! Good job. Too many people just chase the latest highest returns. 30% of the SP 500 is just 8 stocks. 6 of them don't even pay a dividend at all so clearly wouldn't be part of SCHD. Those 8 companies have done well this year, outperforming. However, historically the dividend payers and especially strong dividend growers outperform. 2023 has been an exception. The other reason I like dividends is because I don't want to have to guess about when to sell. I DON'T sell, (except sometimes only to buy some other dividend grower but I don't just get out). I am sticking with SCHD. Also have DGRO and VIG.

[@mattderron]

Thank you!

[@drjulienintartaglia]

Very good content ❤ Thanks from Switzerland 😊

[@mattderron]

Thank you!

[@drjulienintartaglia]

@@mattderron you got one new subscriber 😉

[@ncube2468]

Definitely subscribed after this well thought out and easy to follow run down on SCHD. Much appreciated.

[@mattderron]

Thanks!

[@McRuffin]

A very well researched video with great info. You’ve earned a sub. Can’t wait to see more!

[@mattderron]

Thanks!

[@jamisonm5854]

I have most of my portfolio in SCHD. It's a great fund with great selection criteria for dividend investors, offering a passive option. I have been a bit concerned this year with its underperformance compared to the dividend stock universe, and it seems that the reconstitution in March accelerated its underperformance. UPS was added and performed poorly since, and Abbvie was added just as it's entering an earnings outlook decline. Financials were also reduced, meaning it was exposed to the plunge in banks due to the banking crisis, and is less exposed now to the rebound. I feel these issues caused it a performance handicap that it missed out on, so in the future it will have to overperform others through another lucky reconstitution to catch up. So, my biggest issue with the fund is the reconstitution and it's timing, causing both an opportunity for lucky overperformance or unlucky underperformance. Overall, this gives the S&P 500 another edge (it has many).

[@mattderron]

Yeah reconstitution can be a challenge - ultimately though S&P's performance this year is based on a handful of big tech stocks, so I think SCHD should still do well long term. Companies that continually pay and grow their dividends above the rate of inflation should always do well IMO

[@jamisonm5854]

@@mattderron Agreed. I'm thinking of trying to keep SCHD to no more than 50% of the portfolio for these reconstitution risks while diversifying with some broader dividend universe funds like VYM & DGRO and some individual picks. S&P does still scare me with it's very expensive tech concentration.

[@mattderron]

The only thing about big tech that I wonder is - and not to sound like a "this time it's different guy" - but even though they are overvalued and the biggest companies in the market already...they are ecosystems and monopolies with high margins, and a ton of cash. Valuing them like "normal" businesses doesn't work as well. I don't know, just a thought

[@jamisonm5854]

@@mattderron That is true. I would never bet against them, that is for sure. There is some research, however, that points to value outperforming growth in the very long term, apparently because it is technically riskier (companies with lower PEs for a reason) so the risk premium needs to be higher. With growth like big tech, they fly great until something happens to change the growth calculus, then they can crash and burn like 2022. Could be more interest rate increases, regulation, etc. There were the nifty 50 in the 60s/70s, then again the growth of the dot com era, etc. Since 2009, it's all growth all the time again. For now.

[@technologyartist8917]

I appreciate your analyses. Could you provide some insights on ARES Capital (ARCC) or on Business Development Companies (BDCs) in general? Thank you.

[@mattderron]

Thank you, I'll put it on my list. I've had requests for BDCs before, but I haven't had a chance to dig into it yet. I'll have to do something learning on it

[@technologyartist8917]

I am curious about the factors that might impact their dividend payout. From my understanding, they are obligated to distribute 90% of their earnings as dividends, which is why it has consistently remained in the range of 9-10%. What are the risk factors associated with this payout policy, and what key parameters should be monitored to assess its stability?@@mattderron

[@WW-34]

Loved your video. I’m going to subscribe.

[@mattderron]

Thank you!

[@oanhpham8780]

Thank for this video … help me a lot ❤❤❤❤

[@mattderron]

No problem!

[@Arken2249]

Great video, Matt! Well said.

[@mattderron]

Thanks!

[@albertorbinati5511]

Thank you for explaining this in such a thoughtful and clear way. 👍

[@Madcrzy44]

Incredibly helpful and informative video! Thanks!

[@mattderron]

Glad it was helpful!

[@trappart9209]

Makes me wonder wouldn't it be better if they selected companies based on this criteria and only then took the top half based on dividend yeild

[@imdoc7872]

Great video. Thank you. I DCA every two weeks into schd and schg at 50% each in my taxable brokerage account. Best of both worlds. I buy VOO and schd into my retirement accounts in a 90/10 allocation respectively. I buy only schd using my earned credit card points in a taxable brokerage account that I have through my bank that I use as a savings account. Bottom line, I love schd.

[@mattderron]

Awesome! Definitely a good combo

[@sgtfish49]

Well constructed and objective. Thank you.

[@mattderron]

Thank you!

[@OneNationUnderGod.]

One thing that most dividend investors care more about than I do is the stock's performance. I have no plans to sell my shares because I will be passing my portfolio onto my 3 kids someday. So a dividend stock that is fairly stagnant value wise is not much of a concern for me. I even welcome a dropping share value on occasion for the opportunity to average down as if the shares are on sale.

[@ahmedsharkawy1474]

So when is the best time to buy? It seems the sentiment is negative these days so likely to go down?

[@mattderron]

It depends on your time horizon honestly. If you’re investing for 10,20,30 years then timing is less important. If you’re investing for the short term it’s a totally different process. In general sentiment being down can be an opportunity if you think the fundamentals are still strong.

[@ahmedsharkawy1474]

Thanks you. Very helpful

[@amitkhurana249]

Great videeo matt, you have cleared many doubts in my mind today but i have one question in my mind right now..how much overlap between ETF’s is ok if you want to hold multiple ETF’s.

[@mattderron]

Honestly I don’t think there is one answer to this. It really depends on what your goals are. For example, if you have 2 ETFs that overlap a lot but they are accomplishing slightly different things for you and you understand and know that, there’s not necessarily an issue with that. It’s mainly just knowing how they overlap so you know if you’re getting the coverage and/or diversification that you want. Hope that makes sense

[@HuyNguyen-sp6vy]

My 3 fund: SPY, QQQ and SCHD. My individual stocks: AAPL MSFT GOOGL AMZN TSLA and PLTR.

[@mattderron]

Awesome, you've been doing very well! Having a 3 fun with SPY, QQQ, and SCHD is great. People can adjust their allocation to the 3 depending on where they're at in their time horizon too

[@charlielipthratt7291]

QQQM costs you a little less than QQQ. Useful over a long time horizon.

[@HuyNguyen-sp6vy]

@@charlielipthratt7291 I picked QQQ and SPY because I can do cover call every day to get extra income. Thank you 🙏.

[@LLLL-n4k4y]

You deserve 500k subs at least bro. Very well put togather.

[@mattderron]

Thank you, I appreciate it!

[@LLLL-n4k4y]

@@mattderron Could you compare SCHD vs JEPI & your thoughts?

[@mattderron]

Yeah JEPI is on my list since I know it's a pretty popular one. What I know of it now is that it uses options strategies to deliver higher yield (writing call options against positions held in the fund). Being that's it's actively managed it will have higher costs (0.35% expense ratio) and you're basically trusting them to do a good job of option selling. It's hard to tell how effective their strategy is long term because JEPI is fairly new, being created in 2020. It's probably one I will do a larger video on too. Hope that helps a little bit.

[@charlielipthratt7291]

In another video about JEPI, they said it does best in down and flat markets. If the market starts moving up, it should not do as well.

[@mhl6928]

My little bit of effort is that I found you😂 just subscribed, thanks for the info👍

[@mattderron]

😂 nice!

[@mychelelepera1178]

Appreciate the deep dive analytics you present here. Luv the 'nerdy" and think you explained (without seeming effort) the comparisons and background info every investor should consider. Thank you. New subscriber.

[@mattderron]

Thanks, much appreciated!

[@hazeldavis3176]

Thank you so much for this vid. I learned a lot and your vibe is so chill unlike a lot of finance bros on yt

[@mattderron]

Thank you, I appreciate it!

[@tessjones5987]

That was such ggod information. Thank you. I am 72 and a novice. Coming out of RE.

[@luluonly486]

Very under rated channel

[@mattderron]

Thank you!

[@holywarrior8684]

Thank you very much for the great analysis. These are my core ETFs: SCHD (50%), JEPI (20%), VNQ (15%) and SMH (15%). SMH is my ETF for growth (400%) with a YOC Dividend of approx. 2%.

[@KevinLotusShard]

I do 30% on just SCHD, the rest is VTI. Would this suffice for a new investor?

[@mattderron]

VTI and SCHD should do well over the long term (10+ years). As you keep learning you can always adjust later if you want to

[@arigutman]

Great video and love to see investing kept as simple as investing into an SCHD or the alike...

[@mikedawson2105]

Great advice and excellent presentation.

[@mattderron]

Thank you!

[@mohamedsalah-op6ms]

this is the best explanation for schd . thanks

[@ahmedsharkawy1474]

Is 70 a reasonable price? Or how does it work?

[@jeffwright9431]

At 72 I am beginning to pay close attention to my Living Trust and what it will mean to my surviving children. My kids are already in their forties and doing well but none pay very much attention to the stock market. One, in particular, does not save for retirement in any meaningful way. I will leave a 3-5 fund portfolio to this child that, with any luck, won't be tampered with. SCHD is not exciting but is perfect for long term dripping and relative safety. I have always told my children that it is much easier being young and poor than being old and poor.

[@mattderron]

100% agree on SCHD. Strong dividend payers who consistently generate profits and distribute to shareholders will always do well - even if they won't always do "best" compared to other investments. Awesome to hear how you have set your family up for success. Good luck!

[@connormichelleotoole5774]

Great video. Why make it more complicated than it has to be? Just own SCHD and SCHG. Best of both worlds.

[@mattderron]

Yup, definitely a great combo

[@MH-lg1iu]

Excellent analysis. I am actually one of those people who have dug into the methodology. SCHD is a core holding of mine but it does need to be balanced. Either a growth ETF or just a regular SP500 might be sufficient.

[@FrappuccinoDrinks]

Can you do breakdown the Global dividend aristocrat etfs please

[@rayutwenty-four6753]

It's been a great buying opportunity this year. Love this ETF.

[@punisher6659]

I came to the SCHD party right in March right before the adjustment. Great info. I was investing in SPLG but I just start investing in VTI last week. I'm giving up on SCHD just yet.

[@mattderron]

VTI is great as a core holding for just about anyone. I think SCHD will continue to do well though. Quality companies that grow dividends above inflation usually go up over time. Good to combine it with something that holds big tech IMO

[@punisher6659]

@mattderron I have subscribed to your channel for several weeks now and was intrigued by your content on HYSA. You have a follower here in St.Louis. Who says you can't learn at 56. Thanks for the great content.

[@mattderron]

That's amazing! Thanks for the kind words, I appreciate it!

[@charlielipthratt7291]

@punisher6659 when do you plan on retiring? You have a good cost basis for SCHD if you bought in March. It is up a little bit. I would suggest not giving up on SCHD but just adding new money elsewhere as well as into SCHD. The value stocks have decided to join the party a little bit in the last 45 days. Just dollar cost average into growth, blend, and value right now. No one really knows what's going to happen over the next 6 to 12 months. Historically, once the Fed officially stops raising rates, 12 months later many sectors will be up. Just remember, if you took the top 7 or 8 stocks out of the S&P 500, they would have a very average year so far. I think it would only be up 5-6% as of mid June. I've been investing steadily for 30 years. You only give up if a stock or ETF does something wrong, and they will be in the penalty box for some reason. Think of Wells Fargo and the shenanigans they pulled years ago. I also wouldn't chase Nvidia right now. You're paying up for hopefully spectacular earning thru 2028. Might happen, might not. I'm just a little older than you and I'm positioning for half dividends and half growth. I like the tax aspects of capital gains for the dividends. If I need a little more one year or if budgets change, I can sell some shares from the growth side. That's the best plan for me. Your milage may vary

[@punisher6659]

@charlielipthratt7291 I plan on working full time to at least 68. I will retire from my current job with a pension after 27 years and do something else. I plan to take Social Security at 67.

[@supercruchynoodle]

Hi Matt, new subscriber here, great insight to researching ETFs. Thank you for educating us. Do you think it’s wise to diversify in dividend ETFs like VIG or VYM or DGRO instead of just having SCHD as I’ve entered SCHD investing this year? (I’m a late bloomer to investing but earn decently and would like some that pay dividend, aside wide cap ETFs and VOO plus other IT focused ETFs) in other words is investing diversification in one ETF category advisable given these findings? Thank you !

[@peterswellnesschiropractic4068]

Great break down!

[@mattderron]

Thanks!

[@danpalmer1755]

Love the in depth research

[@mattderron]

Thanks!

[@slmunney7760]

Great and informative video. Thanks much for posting.

[@mattderron]

Thanks, I appreciate it!

[@ALowe-d1d]

I would think with the amount of companies in an etf that the dovidends would be higher. What is going on?

[@mattderron]

Not sure if I understand your question fully but the number of companies won’t increase the dividends necessarily. It would be a relative amount based on each company’s weight in the index. It’s more like a weighted average. Hope that helps

[@peter-pikesloan2361]

It is a hedge on a potential tech bubble - that complements VOO/ITOT/etc.

[@mattderron]

100% agree

[@Fidelb33r]

Well explained SIR Now only if somebody would be able to make an excelsheet of SCHD's methodology

[@brianburton7582]

Dude you have such a soothing voice. I could listen to you all day. No homo…

[@JayLinkinGrylls]

Really good video! Most YT videos are just low efford Clickbait and uninformed stuff trying to farm views. It's crazy how people advertising bad ETFs get so many views

[@mattderron]

Thank you, I appreciate it!!

[@MsMotherWolf]

I'm two weeks later obviously, but my holdings in SCHD are doing fairly well. It's a good spread and bread basket of various stocks and I have enjoyed watching my dividends snowball with it. I haven't seen the videos of these other KZbinrs saying to dump it or not invest, I usually view those as having an agenda and ulterior motive and part of the go for their hype train asset that may or may not crash or be good.

[@Propguypaul]

New to your channel. Great advice. Well done. Ive been in SCHD for many years.

[@mattderron]

Thank you!

[@Dametubes]

Thanks for the info. Good vid.

[@mattderron]

Thanks, I appreciate it!

[@ralfzmina]

My only dividend investment is SCHD. However, I keep going back-and-forth about dividend versus growth for long-term. Therefore, I decided to combine VGT and SCHD. I’ve been contemplating about selling SCHD and investing in QQQM. I’m not quite sold on the idea of investing in dividend ETF when I have 20 years horizon. I am leaning towards investing in growth stocks for 20 years, then selling and buying a dividend/income ETF.

[@mattderron]

I know I've struggled with that same question over the years too. I focused on growth for most of my career, but I wasn't planning on working at my 9-5 forever. In hindsight I wish I would've built a dividend income stream earlier. It would've made the transition of leaving my job easier. If you like your job / career though and want the most opportunity for growth that's not a bad path with a 20 year time horizon. Main thing is that you're investing and thinking long term, so with either path you'll probably do very well.

[@charlielipthratt7291]

@ralfzmina. Is your SCHD in an IRA or Roth? Not having to pay tax on those dividends for decades is golden. If you have 20 more years to go, don't sell the SCHD, just focus on adding to growth for a while if that's your feeling. From a slightly different perspective, S&P 500 and Nasdaq are at highs right now. I would dollar cost average into them over the next year. No one really knows what the market will do. But I would be adding more to SCHD because it hasn't run up as much as the others. I think you might be getting a good cost basis. If you have 20 more years, you have time to DCA into everything, but add a little more to whatever is lagging. That contrarian perspective should pay you dividends over time. (sorry couldn't help it)

[@RB-je3yj]

Vgt & schd are a solid combo, better than the sp 500! I currently own 5k of schd and 600 shares of vgt. This is my entire retirement plan!

[@mattderron]

That's really a solid combo. Basically most of the winners out of the S&P mixed with SCHD

[@Deadeye313]

I put 10% of my income into my Roth, the rest I use to beef up my emergency fund, then I dump any extra into Robinhood for that 4.65% cash sweep while also trying to put $75 a week right now into SCHD. Just bought a house and finishing reno but once that initial hit to the credit cards and bank account are recouped, going to try to get $100 a week into SCHD. Hopefully by next year.

[@justinvanbibber4603]

Great video! Thanks for your insight ❤

[@mattderron]

Thank you, I appreciate it!

[@justinseaverns4436]

What do I think about holding SCHD in a Roth and a regular taxable account like Robinhood

[@mattderron]

Roth is a great tool to use, obviously won't pay tax on dividends while it grows and still have access to contributions. I think dividends in a taxable account are underrated personally. Yes you will pay taxes, but it also builds an income stream that you can access with no limitations. Plus taxable brokerages have step up basis treatment for beneficiaries (don't hear many talking about that) which is cool

[@kg3436]

Such a good point - access to dividend income in your taxable account can be an enabler of bold decisions. For example, giving you the confidence and security to switch jobs if desired, the potential benefits of which are hard to even quantify.

[@mattderron]

Exactly

[@thetruth1446]

Bro you make so much sense and chill like me.

[@mattderron]

Thanks!

[@JumpStartJim]

Thanks for your breakdown in this video. Appreciate you comparing some of the other ETFs and discussing your take on them. You may have this video (I'm a brand new subscriber, so I have yet to look) but your variation on VGT vs. SCHG vs. whatever else you'd like to compare would be of interest too. Coincidentally was looking at a comparison on Seeking Alpha over 10 years and was surprised at what I saw. Your take on the "Growth ETF" would be appreciated in a similar breakdown. Thank You, Matt.

[@mattderron]

Thanks I appreciate it. My video for tomorrow (which I'm hoping to get done today lol) is going to touch on the combination of VGT and SCHD. It won't directly compare the growth funds in terms of makeup, but just in terms of combined performance with SCHD. I will put a growth ETF comparison on the list though, that's a great idea. Thank you!

[@JumpStartJim]

@@mattderron Perfect. I'm personally comparing SCHD and VGT vs. SCHD and SCHG (with VOO as a balancing act)...as a guy with High-Risk Tolerance but very close to retirement age. (I'll never retire, I'm just Old! LOL) Thanks also for the Growth ETF comparison in the future.

[@DiegoLopez-ii2om]

Solid video. So I obv hold schd. What do you think of buying a different dividend etf for my wife’s Roth to diversify incase schd doesn’t do what I want it too

[@mattderron]

It just depends on what your goals are - I would make sure what other dividend ETF you pick doesn't have a lot of overlap with SCHD if that's what you're looking for. I do something similar though - my wife's retirement accounts are straight S&P 500 and nothing else. For mine and our other holdings we invest in individual stocks and other ETFs.

[@Royals_Mindset]

Very informative video, 🤩 thanks...

[@mattderron]

No worries!

[@williampaul8556]

Thank you.

[@mattderron]

No worries!

[@omgeditttt]

Great video

[@mattderron]

Thanks!

[@johnnygotshadow]

Excellent work with this video. Thanks.

[@mattderron]

Much appreciated!

[@tjthompson416]

One of the most informative videos I've seen in a long time. Thanks for sharing!

[@mattderron]

I appreciate it, thank you!

[@liptongtr]

Great breakdown, and you presented it in an interesting way. You deserve more subscribers

[@mattderron]

Thank you!

[@TJSpike]

In my opinion like he stated if you have voo, your already exposing yourself to that divedend yeild and those higher performing stocks that are carrying the market. I think right now is an awsome time to buy schd. If you wanna keep it very very simple just get schd and voo and hold out forever, also dca.

[@TrailBlazer5280]

Thanks for this great breakdown man, had never heard of SCHD until a couple days ago. Its so easy to just buy an etf but there are real differences behind the scenes in some of these and after seeing your presentation I really like SCHD, and DGRO in fact. But when seeing their performance is relatively similar I like the stronger criteria for SCHD and its larger dividend.

[@mattderron]

No worries! I did an update on SCHD and the other dividend ETFs as well that you might be interested in, talking about the difference in 2023 performance. It’s the “SCHD is underperforming in 2023. Here’s why” video

[@caparibalazs]

Wow, great voice, great content, thanx

[@mattderron]

Thank you!

[@Gunieapower33]

I mean.. when you look at the holdings…. All these dividend etfs mostly have the same clump of stocks. Minus DGRW maybe DGRO with their tech lean. These stocks in SCHD will come back around by osmosis. Do you have the stones to wait ? Or the balls to time it ?

[@deluca730]

Thank you for this useful information Matt. Your ability to untangle complicated analysis into clear explanations and strategies is greatly appreciated. Do you have any suggestions as to what free tools are available for stocks, ETFs and Mutual Funds screening? Thanks.

[@mattderron]

Thank you! For free screeners, usually your brokerage account will have one. Schwab (which is what I use) has a really good one. Also Finviz is a pretty good free screener too

[@Sunshinebchh]

Fantastic video!!!!! Truly appreciate the breakdown

[@mattderron]

Thank you!