SCHD Is A Suckers ETF, Buy These Instead

Core Viewpoint - The article compares various ETFs, highlighting their yields, returns, and suitability for different types of investors, particularly focusing on dividend investors and those seeking growth. Group 1: Schwab U.S. Dividend Equity ETF (SCHD) - SCHD offers a high yield of 3.83% and a low expense ratio of 0.06% [1] - Despite its high yield, SCHD has only produced an annualized return of 5.6% over the past three years, which is comparable to some corporate bonds [2] - SCHD is considered suitable for retirees due to its low volatility, but it may not be the best option for maximizing returns [2] Group 2: Invesco QQQ Trust (QQQ) - QQQ has delivered an impressive annualized return of 29.5% over the past three years and an average return of 19.3% over the past decade [3] - The ETF heavily emphasizes large-cap tech stocks, particularly the "Magnificent Seven," with tech making up more than half of its assets [4] - QQQ has a lower SEC yield of 0.44% and a higher expense ratio of 0.20% compared to SCHD, but it has historically provided better returns [5] Group 3: VanEck Semiconductor ETF (SMH) - SMH has a lower SEC yield of 0.28% and a higher expense ratio of 0.35% [6] - The ETF focuses on semiconductor stocks benefiting from the AI boom, with Nvidia making up 17% of its total assets [6] - SMH has achieved an annualized return of 48.9% over the past three years and 30.4% over the past decade, significantly outperforming SCHD [7] Group 4: Vanguard High Dividend Yield Index Fund ETF (VYM) - VYM offers a lower yield of 2.39% but has an annualized return of 12.0% over the past three years and 11.2% over the past decade [8] - The ETF is well-diversified with over 550 stocks, and its top 10 holdings account for only 28% of total assets [9] - VYM is considered a better choice for growth compared to SCHD, especially for investors not relying on immediate dividends [10]