The Schwab US Dividend Equity ETF (SCHD) has become a giant $68 billion behemoth, highly popular among dividend-seeking investors, especially retirees. It is a five-star rated fund with a strong record of dividend distributions and growth. This article explores the top 3 reasons you should avoid SCHD ETF and the better alternatives.

SCHD ETF has a low dividend yield

The main reason why investors buy the SCHD ETF is because of its consistent dividend payouts to invest. It has a record of 13 years of consecutive dividend growth, and a compounded annual growth rate (CAGR) of 11%, higher than the sector median of just 6.15%. 

The challenge, however, is that the fund has a fairly small yield, especially when you consider the risk-free return offered by US government bonds. A closer look shows that short-term government bonds yield over 4%, while the PIMCO Intermediate Municipal Bond Active Exchange-Traded Fund ETF (MUNI) yields 3.48%. The latter benefits because its income is not taxable.

SCHD’s dividend yield is higher than the Vanguard S&P 500 (VOO) ETF, which has a 1.20% yield. Nonetheless, the spread between the two is not all that big.

Therefore, assuming that you have invested $100,000 in SCHD ETF, and if the yield remains at 3.75%, you can expect to receive $3,750 a year or $312 a month. The final figure will be lower than that because of taxes. A similar amount invested in the ten-year government bonds will bring in $4,100 a year or $341. 

This example focuses only on the dividend payout. Of course, the SCHD ETF will likely do better than bonds because of its price appreciation. 

Schwab US Dividend ETF lags behind the S&P 500 index and Nasdaq 100

The other reason to avoid the Schwab US Dividend ETF is that it often underperforms the S&P 500 and Nasdaq 100 indices. 

While the fund has a higher dividend yield, its total return is usually smaller than the benchmark US indices. We believe that the total return is a better option for an investor because it includes the dividends paid and the price return. 

The SCHD ETF has returned 1.72% this year, while the Vanguard S&P 500 and the Invesco QQQ ETF (QQQ) have gained 4.06% and 5.27%, respectively. 

The same performance has happened in the last three years when the SCHD’s total return stood at 7.90% compared with the other two’s 38% and 54%. As shown below, it has lagged behind the two in by far in the last five years. 

SCHD ETF is not forward-looking

The other reason to avoid the SCHD ETF is that it is not a forward-looking fund, which is understandable since it invests in traditional companies that have a record of paying dividends. 

A closer look at the sectors shows that most of its companies are in slow-growing areas like financials, healthcare, consumer staples, industrials, and energy. 

The biggest companies in the fund are Coca-Cola, Abbvie, Cisco Systems, Amgen, Pfizer, Chevron, and Verizon. While all these are all good companies, they don’t have a futuristic aspect to them.

The biggest changes shaping the world today are in the technology sector. They include areas like cloud computing, artificial intelligence, and quantum computing. This explains why the SCHD ETF trades at a discount compared to the broader market. It has a price-to-earnings ratio of 17, lower than the S&P 500’s 22. 

Therefore, while SCHD is a good dividend ETF to consider, it has some limitations, including its low dividend yield, underperformance, and its lack of a forward-looking view.

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The iShares Bitcoin ETF (IBIT) has done well and broken records in the financial services industry as its assets surged to over $54 billion. This is a great performance since the popular SPDR Gold ETF (GLD), which was started in 2004 has accumulated $80 billion in assets. That is a sign that IBIT will eventually pass GLD in the coming years. This article explains why the IBIT ETF may surge, and why there is a better alternative to buy.

The bullish case for the IBIT ETF

The IBIT ETF has done well, and there are chances that it will soon have a strong bullish breakout. First, Bitcoin will likely have a strong bullish breakout in the long term. While history is not the best predictor of an asset, we can use historical data to predict what it will do in the future. 

Bitcoin was started in 2009 and was trading below $1 at the time. It then surged to a record high of $109,200 earlier this year. Bitcoin’s surge to $109,000 was not linear. Instead, it faced major crashes in the last 16 years. 

For example, Bitcoin’s price peaked at $68,500 in 2021 and crashed by 76% by December 2021, as FTX, Celsius, and Terra crashed. It also crashed by 85% between December 2017 and December 2018. 

Most recently, it soared to a high of $73,756 in March 2024 and then retreated to $49,325 in July. In all this time, Bitcoin has managed to beat odds and stage a strong comeback. Therefore, there is a likelihood that the coin will emerge from the current consolidation and rebound.

Bitcoin supply and demand dynamics

Second, Bitcoin has one of the best demand and supply dynamics in the financial industry. It has a supply limit of 21 million of which 19.8 million coins have been mined. This means that there are just 1.2 million coins that will ever be mined, a situation that will take time to happen since mining difficulty is rising. 

Remember, Bitcoin goes through a halving period every four years that reduces the block rewards by half. As such, there is a likelihood that the 21 million coins will never be mined as the difficulty will keep rising. 

Bitcoin demand is also soaring. For example, the IBIT ETF has already accumulated $54 billion worth of coins, while all ETFs have over $140 billion in assets. As such, a combination of falling supply and rising demand means that Bitcoin price will keep surging.

Bitcoin price has strong technicals

The other bullish case for the IBIT ETF is that Bitcoin price has formed a bullish flag and a cup and handle pattern on the weekly chart. A bullish flag has a long vertical line and a rectangle pattern, and in most cases, it leads to more gains. 

A C&H pattern, on the other hand, has a rounded bottom and a handle section. In this case, a strong bullish breakout will see Bitcoin price surge to $123,000 in the near term.

IBIT ETF is good, but there’s a good alternative

While the IBIT ETF is a good fund to buy, it is not the best. Instead, we believe that the Grayscale Mini Bitcoin ETF (BTC) is the best one to buy. It is a highly liquid fund with over $4.1 billion in assets under management, making it the fifth-biggest fund to invest in.

It beats the IBIT ETF because of its lower fees. It has an expense ratio of 0.15%, lower than IBIT’s 0.25%, giving it a 10 basis point spread. Therefore, since these are similar funds, why would one pay a higher fee? For example, a $100,000 investment in IBIT will cost you $250 a year, while BTC will cost you $150. Besides, IBIT and BTC share a similar custodian: Coinbase.

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The JPMorgan Equity Premium Income ETF (JEPI) and the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) are some of the biggest boomer candy funds, thanks to their high dividend returns. JEPI has a dividend yield of 9.5%, while JEPQ yields 9.53%, higher than most dividend funds and US government bonds. So, are these ETFs good investments in 2025?

How JEPI and JEPQ ETFs work

JEPI and JEPQ are popular funds with over $40 billion and $23 billion in assets, respectively. Launched a few years ago, these funds aim to reward their shareholders with regular high dividends and price appreciation.

They achieve this using the covered call approach, where they invest in stocks and then sells or writes call options of the index. JEPI ETF has invested in about 100 companies in the S&P 500 index and then sold call options of the index itself. The biggest companies in the fund are the likes of Apple, NVIDIA, and Microsoft.

The JEPQ ETF, on the other hand, has invested in the 100 companies that make up the Nasdaq 100 index and then sold the Nasdaq 100 call options. 

These funds generate returns in three key ways. First, they benefit from the dividends paid by the constituent companies. Third, the funds make money from the share price appreciation. JEPQ benefits when the Nasdaq 100 index is rising, while JEPI rises when the S&P 500 does well.

Further, the two funds make money from the call option, whereby, they receive a premium for writing the call option. They then return these premiums to shareholders through monthly dividend distributions. 

Are JEPI and JEPQ good investments?

A common question is whether the JEPI and JEPQ are good investments, especially for dividend investors. 

JEPI and JEPQ ETFs seem like good investments because of their high dividend yields and a reasonable expense ratio of 0.35%. Besides, these funds yield much more than the average ETFs like the VOO and QQQ.

As such, a $100,000 invested in the JEPI ETF means that it will bring in about $9,500 a year in dividend payouts. Excluding fees and taxes, it means that the fund would bring in about $8,500 a year in dividends or $708 a month, which is a good number. The return will also be higher if the underlying asset prices increase. 

However, despite their lower yields, investing in pure S&P 500 and Nasdaq 100 indices has been a better long-term cash allocation strategy. 

This view is based on the total return, which includes the price and dividend return. The JEPQ ETF’s total return in the last three years stood at 54%, while the Invesco QQQ returned 58%. Similarly, the JEPI ETF returned 29%, while the Vanguard S&P 500 ETF (VOO) returned 45%.

The same performance occurred in the last 12 months: JEPQ returned 22% vs. QQQ’s 25%. JEPI’s 13% return was lower than VOO’s 22%.

Better buy between JEPI and JEPQ

While the JEPI and JEPQ have lower returns than their benchmarks, historical data shows that the latter is a better buy. It has a higher dividend yield and similar performance to that of the Nasdaq 100 index. 

For an investor with a long-term view, the vanilla S&P 500 and Nasdaq 100 indices are the best funds to invest in. They have lower expense ratios and have a long track record of beating inflation and the broader market. 

The S&P 500 index has soared from 44 in 1950s to over $6,100 today. Similarly, the Nasdaq 100 index has jumped from less than $300 in 1980s to $22,200 today. These funds have contended with wars, recessions, and other geopolitical issues.

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Nio stock price has slumped in the past few years, becoming one of the worst-performing electric vehicle companies in China. It has dropped by 26% in the last 12 months and 93% from its highest level in 2021. This article explains why the Nio share price is ripe for a 75% surge in 2025. 

Nio stock price has strong technicals

The main reason why the Nio share price has room for more upside is that it has strong technicals. On the daily chart, we see that the stock has formed a falling wedge chart pattern, which is characterized by two falling and converging trendlines. These two lines are now nearing their confluence levels, where a bullish breakout typically happens.

The Nio share price has also formed a bullish divergence pattern. The Percentage Price Oscillator (PPO), a unique type of MACD, has moved upwards and is about to crozz the zero line. Additionally, the Relative Strength Index (RSI) has continued moving upwards and has formed an ascending channel. 

Therefore, these factors may explain why the Nio share price will soon surge. A strong rebound will see the stock surge to the next key point at $7.70, its highest level in September last year, which is about 73% above the current level. 

A drop below the lower side of the wedge pattern at $3.97 will invalidate the bullish view. It will signal that there are more gains in the coming months, with the next point to watch being at $3.70, its lowest point in August last year. 

Potential catalysts for the Nio share price

There are numerous catalysts for the Nio stock price this year. First, there are signs that the Chinese economy is doing relatively well, helped by the stimulus by Beijing’s authorities. The most recent data showed that China’s economy expanded by 5.4% in the fourth quarter and by 5.0% for the full year. 

This economic recovery may continue this year now that the PBoC is focused on cutting interest rates. Analysts are predicting about 2 rate cuts this year, a move that will make the borrowing costs cheap for the Chinese.

Second, Nio’s business is still seeing strong growth even as the electric vehicle industry gets highly crowded. The most recent monthly deliveries data shows that the firm delivered 13,863 vehicles in January this year, up by 38% from the same period a year earlier. Most of these deliveries were from the NIO brand, while the newly launched ONVO had a strong performance. 

Analysts anticipate Nio revenue growth to continue

Third, Nio’s financial results show that the company’s business is doing well. Wall Street analysts believe that Nio’s revenue for 2024 will be 68 billion RMB or about $9 billion, representing an annual growth rate of 23%. They also expect that its revenue in 2025 will be 97 billion RMB or 42.7% annual growth.

These are strong numbers considering that other EV companies are not doing well. For example, Tesla revenue dropped in 2025, as competition with the likes of BYD and Huawei jumped.

Additionally, NIO has a strong balance sheet after raising cash last year. This means that its balance sheet will help it to offset its substantial losses. Just recently, the management completed the repurchase right on its 0.50% convertible senior notes worth about $378 million.

Further, the company has more room to grow internationally because of its quality vehicles that are of a lower price. The potential markets are in Europe, Latin America, and Southeast Asian region. 

Nio is also fairly undervalued compares to other EV companies. It has a price-to-sales ratio of 0.99, lower than Tesla’s 11.8 and Lucid’s 2.88. 

Read more: Tesla’s former board member calls the stock a ‘sell’—here’s why

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US stocks have been somewhat muted in recent sessions after the Bureau of Labour Statistics said inflation was up more than expected in January.  

The consumer price index came in up 0.5% for the month and 3.0% for the year on February 12.

In comparison, economists had forecast a 0.3% and 2.9% increase, respectively.

That said, here are the top two inflation-resistant stocks to own this year if you’re not entirely convinced that the US Federal Reserve will succeed in bringing CPI down to its 2.0% target in 2025.

Procter & Gamble Co (NYSE: PG)

Procter & Gamble is a renowned name that’s known to be relatively resistant to inflation.

Why? Because it has a diversified portfolio of essential products like Tide, Gillette, and Pampers that consumers continue to buy regardless of the economic environment.

This enables P&G to pass on higher costs to consumers without significantly affecting demand.

Additionally, Procter & Gamble focuses on product superiority and innovation that translates to customer loyalty even in the face of higher prices.

Its diverse range of products also helps mitigate risks associated with inflation in any single market segment.

Last month, the New York-listed giant reported its financial results for the second quarter that topped Street estimates on early signs of improvement in Greater China. In the earnings release, Jon Moeller – the company’s chief executive told investors:

“We remain committed to our integrated growth strategy … [that] has enabled our solid results and is a foundation for balanced growth and value creation.”

Moreover, P&G shares currently pay a healthy dividend yield of 2.44% as well which makes them all the more attractive to own at writing.

Chevron Corp (NYSE: CVX)

Another great pick for investors in search of stocks that are relatively insulated from inflation is Chevron.

That’s because the price of oil and gas tends to increase during periods of inflation, which makes it easier for energy companies like Chevron to pass on the higher costs to customers and maintain its profit margins.

Plus, the energy demand typically remains relatively stable, even during economic downturns, as it’s essential for transportation, manufacturing, and heating.

Chevron is particularly attractive to own at writing as it announced plans to lower its global headcount by about 20% this week.

The move will see it let go over 9,000 workers and contribute meaningfully to the company’s broader plan of cutting costs by up to $3.0 billion by the end of 2026.

Note that Wall Street currently has a consensus “overweight” rating on CVX shares. Analysts see an upside in them to $176 on average which indicates potential for about a 12% gain from current levels.

A lucrative 4.37% dividend yield is among other reasons to own Chevron stock for 2025.

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