Playing Defense With SCHD (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• SCHD's net exposure vs the S&P 500 has turned more defensive after 2024's Portfolio Reconstitution.
• SCHD's relative underweight in technology and semiconductors is favorable in the current environment of heightened recession risks and waning enthusiasm for AI-themed plays.
• The ETF's relative overweight in banks is favorable, as this sector's growth prospects are attractive as credit quality concerns ease amid strong Q2 FY24 earnings.
• SCHD's valuation discount vs the S&P 500 has widened from 28% at the start of this year to 41%, making the ETF more attractive.
• The technicals relative to the S&P 500 look very attractive as SCHD prints a strong V-shaped recovery off a major 12-monthly support level.

Read the full article here.