SCHY ETF

Schwab International Dividend Equity ETF offers an attractive yield and lower valuation compared to U.S. markets, making it a compelling option for dividend investors. Warren Buffett's recent stock sales and elevated Shiller P/E ratio suggest U.S. markets are overvalued, prompting a cautious investment approach. While U.S. stocks have qualitative advantages, international equities provide a lower valuation and decent growth potential, making them a viable alternative.

Schwab International Dividend Equity ETF focuses on 100 dividend stocks, emphasizing yield, dividend growth, and quality. The SCHY ETF is well-diversified across countries, sectors and holdings, and shows value characteristics without sacrificing growth. The SCHY track record is promising compared to an ex-US benchmark, but it lags some competitors.

Dividend stocks and ETFs have performed well recently, making high yields harder to find; SCHY offers a 4.58% FWD yield as an alternative. SCHY, launched in 2021, is an international version of SCHD with a higher expense ratio and similar short-term returns, but lags in the long term. SCHY's sophisticated screening process ensures high-quality, liquid stocks with consistent dividends, but its performance is still behind VYMI.

SCHY employs a rigorous screening process whilst selecting its stocks, but the results are not good enough. VYMI, its larger peer, appears to have better qualities. We close with some thoughts on the technicals and the valuations.

SCHY: A Performance Drag Compared To VYMI (Rating Downgrade)

Schwab International Dividend Equity ETF targets high-dividend-yielding companies outside the US, providing consistent income and potential capital appreciation. SCHY has a diversified portfolio with a well-balanced sector composition, offering broad-based exposure and reducing investor risk. The fund has outperformed similar ETFs over the past two years and has a lower expense ratio, making it a cost-effective investment option.

Schwab International Dividend Equity ETF (SCHY) aims to replicate the success of its US counterpart (SCHD) but faces challenges in finding dividend growth companies in foreign markets. The fund focuses on foreign stocks with a history of consistent dividends and financial stability, resulting in a portfolio of 120-130 stocks with high dividend yields and low volatility. While SCHY has shown dividend growth in the past two years, the lack of dividend growth criteria and limited pool of dividend growth companies outside the US may impact its future performance.

The US Dollar Index has been on a strong run, causing foreign stocks to underperform relative to US equities. The Schwab International Dividend Equity ETF has performed well despite the dollar's advance, with a 3.7% trailing 12-month yield. SCHY is a cost-effective option for investors seeking tax efficiency and offers a diversified portfolio of high dividend-yielding stocks.

SCHD is one of the most popular dividend ETFs in the market. SCHY is the international version of SCHD. An overview of the fund follows.