By Ryne Mauck
Publication Date: 2026-09-30 20:01:00
SCHD’s rulebook kicked out one of the market’s hottest chip stocks before its biggest run, and the reason it happened reveals a hidden cost that no expense ratio will ever show you.
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If you own the Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) for income, you probably trust its rules more than any stock picker. In March 2024, those rules dropped Broadcom (NASDAQ:AVGO | AVGO Price Prediction) from the fund’s index. From its March 15, 2024 close to its September 28, 2026 close, Broadcom’s share price rose about 183%. SCHD holders owned none of that run.
How a Rising Share Price Gets a Stock Sold
SCHD tracks the Dow Jones U.S. Dividend 100 Index, which reconstitutes once a year in March. The index ranks candidates partly on dividend yield, meaning the annual dividend divided by the share price. That fraction hides a catch most holders…
