SCHD: Annual Portfolio Refresh Won't Help (Archive)
SCHD’s looming energy overweight risks turning dividend strength into cyclical performance drag.
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
- I replicate the new index based on the reconstruction rules to anticipate what the new SCHD portfolio may look like.
- I am not concerned about Financials and Regional Banks' exposure as I expect those weights to be small.
- But I anticipate a sharp rise in Energy exposure as higher O&G prices in 2022 and strong capital return policies have elevated ROEs and dividend yields.
- I think this will drag down SCHD's performance further vs. the S&P 500 since I expect further weakness in O&G prices due to increased chances of a recession.
Read the full article here.
Disclosures and Disclaimers
Past performance ≠ future results. Not investment advice. See full Disclaimer.
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