The Schwab US Dividend Equity ETF (NYSE:SCHD) is firing on all cylinders this year, and is set to dethrone the Vanguard Dividend Appreciation ETF (NYSE:VIG) to become the new dividend king.
Schwab US Dividend Equity ETF to Pass the VIG ETF
SCHD has had a total return of 30% this year and is now hovering at its all-time high. In contrast, VIG has jumped by 11.50%, while the Vanguard S&P 500 ETF (NYSE:VOO) rose by 13.45%. It has also beaten the tech-heavy Invesco QQQ ETF (NASDAQ:QQQ), which has risen by 17%.
SCHD’s surge has also coincided with rising demand from American investors. According to ETF Db, the fund’s inflows jumped by over $4.2 billion in the last 30 days and $19.6 billion since January. It has had outflows in just two weeks this year.
As a result, SCHD is set to dethrone the VIG ETF in terms of assets under management (AUM). Its AUM has jumped to $112 billion and is close to overtaking VIG, which has over $113.78 billion in assets.
SCHD’s performance is notable since it is normally seen as the anti-artificial intelligence fund. For one, it has a limited exposure to high-flying AI companies. Instead, its biggest companies are in sectors like health care, consumer staples, energy, industrials, and financials.
The top names in the fund are companies like Merck & Co, Amgen, Abbott Laboratories, Coca-Cola, and Verizon Communications. This is in contrast to popular funds tracking indices like S&P 500 and Nasdaq 100 that count the biggest tech names like Microsoft, Nvidia, and Google as their biggest constituents.
SCHD ETF Technicals Suggest More Upside Possible
Technicals suggest that the SCHD ETF may have more gains to go in the near term, which will help it to overtake VIG to become the biggest dividend ETF in the world.
The fund has moved above the important resistance level of $31.42, its highest level in March this year. It is being supported by the short-term and long-term moving averages.
At the same time, the Average Directional Index (ADX) has jumped to 36, a sign that the rally is gaining momentum. Therefore, the fund will likely continue rising as bulls target the key resistance at $40.
The risk, however, is that the two lines of the MACD have formed a bearish crossover, which may lead to a brief pullback.
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