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SCHD/SPHD: Two Great Dividend ETFs That Go Great Together

Published Fri, 16 Feb 2018 13:24:03 -0500 on Seeking Alpha

I recently wrote an article talking about the PowerShares S&P 500 High Dividend Low Volatility ETF (SPHD) and its prospects for the upcoming year. The comment thread got pretty active with several readers sharing how they used SPHD in conjunction with other dividend ETFs in their portfolios. One fund that kept coming up several times in that discussion was the Schwab U.S. Dividend Equity ETF (SCHD). Some said that they preferred SCHD over SPHD. Some said they owned both of them together. Others wondered if the two funds were a good fit.
What almost everybody agreed on is that SPHD and SCHD are both great funds. They’ve got 5-star ratings from Morningstar, and have long histories of delivering superior risk-adjusted returns and above average dividend yields. But throwing a bunch of highly rated funds together does not a portfolio make! There are the matters of risk balancing, correlation, overlap and style to consider. SPHD and SCHD are great, but are they great together? The answer is yes, and here's why.
SPHD: Targeting Conservative High Yields
SPHD tracks the S&P 500 Low Volatility High Dividend Index, which starts by identifying, from the S&P 500, the 75 securities with the highest dividend yields over the past 12 months, with no one sector within the S&P 500 allowed to contribute more than 10 securities. From those securities, the index selects the 50 securities with the lowest volatility over the past 12 months. The index weights each of the... Read more


Older articles featuring Schd,sphd (SCHD,SPHD):
Dividend Growth For Couch Potatoes
Are Dividend Stocks Expensive? A View From The Top
The Best Dividend ETFs
The iShares Select Dividend ETF: Not Your Traditional Dividend ETF
Higher Dividends With Less Risk (Part 2): A Second Look At ETRACS 2x US High Dividend Low Volatility ETN
Dialing Up A Dividend ETF Idea
Best Dividend Deals Of 2014