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# Why SCHD May Lag SPY (Archive)
- URL: https://www.huntingalphas.com/why-schd-may-lag-spy-archive/
- Published: 2024-12-11T23:01:00.000Z
- Updated: 2026-02-28T05:23:32.000Z
- Description: SCHD’s tech underweight and bank overweight create a macro setup favoring SPY instead.
- Author: Vish (Hunting Alphas)
- Tags: 5-Minute Pitches, #noindex, Archive, #sa-origin, ETF, SCHD, SPY

*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 has a significant underweight in technology and overexposure to banks.
- A dovish rate outlook is beneficial for long-duration tech growth stocks, but is a headwind for banks due to higher deposit costs weighing down on NIMs.
- Industry commentary suggests the tech spending is expected to rebound in 2025\. Due to omission of this exposure, SCHD is vulnerable to lag the S&P500.
- Although elevated valuations of the Mag 7 stocks in SPY pose a risk, SCHD's valuation discount vs. SPY has reduced from 40.5% to 16.5%, making the former ETF less attractive.
- The SCHD vs. SPY charts show a lack of bullish follow-through following an initial sharp reaction from a 12-monthly support level.

Read the full article [here](https://seekingalpha.com/article/4743709-why-schd-may-lag-spy?ref=huntingalphas.com).

#### Disclosures and Disclaimers

**Past performance ≠ future results. Not investment advice. See* [**full Disclaimer*](https://www.huntingalphas.com/disclaimer/)**.*