14-Year Head-to-Head: SCHD vs S&P 500

AI-generated source summary

The video compares the historical performance of SCHD and the S&P 500 (represented by SPY) over a 14-year period, starting from October 2011. Both funds started with an initial investment of $100,000. SCHD, a dividend-focused ETF, commenced trading at $8.50 per share and grew to $30.98 by April 2026, yielding a share price return of +264.5%. It paid out approximately $102,706 in dividends during this period. The final value of SCHD with reinvested dividends reached $572,889, representing a Compound Annual Growth Rate (CAGR) of 12.80%. In contrast, the S&P 500 (SPY) started at $125.50 and ended at $704.08, resulting in a higher share price return of +461.0%. SPY paid out approximately $60,424 in dividends, leading to a final value of $722,549 and a CAGR of 14.62%. While SCHD's total return CAGR was lower by 1.82 percentage points compared to SPY's, the analysis highlights SCHD's strength in defensive sectors and its performance during market downturns, such as in 2022 when it lost only -3% compared to SPY's -18.3%. The valuation metrics show SCHD trading at a lower Price/Earnings (P/E) ratio of 16-17x compared to the S&P 500's 24-26x, suggesting cheaper earnings. The comparison underscores that SCHD's total return is significantly driven by dividend reinvestment, which closed a substantial portion of the gap with the S&P 500 in terms of total return.

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