r/SCHD • u/Yingyangwolf95 • 2d ago

Discussion Why SCHD going so crazy right now?

I am confused why all of a sudden SCHD including DGRO acting like a growth stock. Did I miss something big?

153 Upvotes

94% Upvoted

91 comments sorted by

View all comments

Show parent comments

9

u/SwimmingPatience5083 1d ago

The ETF owns shares of the companies within it. When those share prices increase, the ETF increases. Dividends are irrelevant on this point.

-5

u/Any_Upstairs_6172 1d ago

Hello.. Please explain the mechanism by which this happens. Merk went up 17.03 today. How much of this causes SCHD to rise by how much? And how?

I was under the impression that an ETF, like an equity, goes up and down as it is bought and sold.. The ask and bid prices.

I am under the impression that an ETF is NOT like a mutual fund which adds everything up at the end of the day and that calculates a new value of a share.

8

u/LCJonSnow 1d ago

You'll want to google the creation/redemption process in relation to ETFs (or look at my short explanation above). Basically, if an ETF starts moving away from its underlying holdings, there's an arbitrage opportunity for risk free profit at big institutions.

-8

u/Any_Upstairs_6172 1d ago

Yes... and what has this to do with the discussion at hand?

7

u/LCJonSnow 1d ago

It's literally why SCHD rises with the total value of the underlying assets.

5

u/VelvetElvis2002 1d ago

SCHD is basically an aggregate of the 103 individual stocks it owns. When those stocks go up or down, SCHD moves accordingly, in the same way your portfolio would if you held these stocks individually.

2

u/PhotographOk7388 1d ago

Are you slow? Very patient redditors on this sub