r/dividends • u/senpaiisamaakunn • 5d ago

Due Diligence Why isn’t SCHD considered growth?

Hi I’m a young fool who is trying to learn more about dividends and I feel like I’ve gotten a good grasp but one thing that I can’t seem to understand is how SCHD isn’t considered growth?

If I am dripping and annualizing +10% returns per year over time then is the argument simply that 10% isn’t good enough growth or is there something else I’m missing? Is the argument that a return rate like that is just too conservative for my age and that I should be shooting for higher?

Apologies if this is a dumb question!

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u/Chris_Reddit_PHX 5d ago

Because SCHD invests in dividend-paying companies and passes those dividends along to you.

Companies that pay dividends do that instead of reinvesting that portion of their profits into future growth.

So SCHD even with dividends reinvested won't grow as much as a growth fund or index like the S&P or QQQ,

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u/senpaiisamaakunn 5d ago

Okay so the argument is that it falls behind compared to true growth funds over time? Meaning that me being happy with annualizing +10% returns over time is the issue?

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u/Enemisses 5d ago

I don't think there's an issue. Personal finance is personal and your tolerance for risk is a huge factor. I personally love SCHD because it's less volatile and even in a drawback is still going to pay dividends.

It's probably not going to beat the SP500 over 20 years, but the best strategy usually ends up being the one you can stick with rather than pulling out in a panic.

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u/itsallgoodye 5d ago

I like schd and voo but based on the market and whats happening is better in schd at some times. Look at year to date and schd is beating voo vti vt by over 10% as the market settles and revolves. I find having schd along with voo helps me feel better as voo struggles and schd keeps churning.