After a Hot Start to the Year, the Schwab U.S. Dividend Equity ETF (SCHD) Has Gone Practically Nowhere for 5 Months. Is It a Buying Opportunity for Value Investors?

Over the past 5 months, the Schwab U.S. Dividend Equity ETF is lone up 3.4%, portion the S&P 500 is up 10.9% -- driven by monolithic gains successful megacap tech stocks.

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Here's wherefore the Schwab U.S. Dividend Equity ETF has stalled out. Let's find whether it's a buying accidental for diligent investors.

An ETF built astir value-focused sectors

The Schwab U.S. Dividend Equity ETF is intended to supply investors with a dependable watercourse of passive income, by investing chiefly successful industry-leading, large-cap, dividend-paying worth stocks.

Unlike the S&P 500, which is heavy weighted toward growth-focused sectors similar exertion and communications, a whopping 55.1% of the Schwab U.S. Dividend Equity ETF is invested successful user staples, healthcare, and energy, portion little than 20% is successful tech and communications. For context, user staples, healthcare, and vigor marque up 16.5% of the S&P 500, portion tech and communications relationship for 47.3%.

Growth-focused sectors had a dilatory commencement to the twelvemonth arsenic investors questioned grounds superior expenditures connected artificial quality (AI). But portion galore of the largest tech stocks by marketplace headdress stay successful ample drawdowns from their all-time highs, the monolithic roar successful semiconductor stocks -- particularly memory-chip stocks -- has propelled the S&P 500 to caller highs. The iShares Semiconductor ETF, which tracks the industry, has astir doubled twelvemonth to day -- up 93%, compared to 29% for the tech sector. And the semiconductor manufacture unsocial present makes up astir 43.5% of the tech sector.

In sum, semiconductor stocks are providing market-moving gains to the large indexes. The Schwab U.S. Dividend Equity ETF holds 2 semiconductor stocks: Texas Instruments (4% weighting) and Qualcomm (3.1% weighting). But overall, investors should expect the ETF to lag the S&P 500 erstwhile growth-focused sectors are fueling marketplace gains.