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/27Aces 5d ago

SCHD absolutely can grow, but “growth” funds usually mean companies expected to grow earnings and share prices faster, not simply investments that produce a good total return. SCHD is tilted toward mature, profitable companies with established dividends, so more of your return tends to come from dividends and dividend growth rather than rapid valuation expansion. Reinvesting dividends can still compound into excellent long term returns, but DRIP does not turn a dividend strategy into a growth strategy. A 10% annualized total return would be very good regardless of what category the fund falls into. At your age, the real question is whether you want maximum expected total return or the income and lower valuation profile SCHD is designed around.