SCHD serves as a hedge against the S&P 500 with strong total returns and dividend growth, making it a suitable large holding for income investors.

and then we have a nice chunk of change in the dividend ETF SCHD. Now, this is an entire conversation in itself, and people have strong opinions about SCHD. But, here's the reality. What we've seen so far in SCHD is just tremendous total returns year-to-date. It's up 23.7% outperforming other dividend ETFs like DGRO and VIG, and even outperforming the S&P 500 by a wide margin. If we zoom out over the last year, SCHD now has a total return of nearly 32% outperforming all of its peers. Now, here's the pushback that I know a lot of people are thinking, and it's very fair pushback. I completely agree. SCHD has definitely underperformed over the last decade, at least relative to the S&P 500, but not by nearly as much as you would suspect. But, here's what a lot of people miss. For a lot of the last decade, SCHD was actually outperforming the S&P 500. But, then when we had the AI boom, starting in late 2023, tech started to run, and that's what pushed the S&P 500's performance past SCHD. But, here's what a lot of people have never really come to understand. It's because it doesn't get discussed very often. SCHD has only existed since 2011, but the index that it tracks, the Dow Jones US Dividend 100 Index, has back-tested data going all the way back much further. So, here's what we have to understand. When we look at the returns from 1999 to 2025, the Dow Jones US Dividend 100 Index has a 10.5% annualized total return, while the S&P 500 during that same time period 8.2% annualized total return. So, the reality is if you look at the performance of the index that SCHD tracks since 1999, it's outperforming the S&P 500. Now, this really shouldn't come as a huge surprise because most of the time, the outperformance for funds like SCHD that have more value dividend style holdings versus the S&P 500, the outperformance happens during market pullbacks. So, in a sense, SCHD is a hedge against the S&P 500 while also producing incredibly strong total returns, providing a very nice starting yield of above 3%, and of course, dividend growth that historically speaking has been in the double digits. So, it's easy to see why someone looking to one day live off dividends would make SCHD a large holding in their portfolio.