SCHD & SCHG Stock Splits | Everything You NEED To Know!

Charles Schwab just announced share splits on 20 of their ETFs, including two popular ETFs i’ve recently mentioned on my channel that are SCHD and SCHG. This video covers everything you need to know about the upcoming stock splits for SCHD and SCHG. - Enjoy!

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What is a stock (share) split?
A stock (share) split increases the number of shares a company or ETF issues while reducing the share price. For example, in a 3-for-1 split, you receive three shares for every one share you owned, but the price per share drops to one-third.

Why is Charles Schwab splitting shares of SCHD and SCHG?
Charles Schwab is splitting the shares to make these ETFs more accessible to investors. For SCHD, it’s undergoing a 3-for-1 split, and SCHG will have a 4-for-1 split after October 10, 2024.

What is SCHD, and why is it popular?
SCHD is the Schwab U.S. Dividend Equity ETF that tracks the Dow Jones U.S. Dividend 100 Index, featuring companies with strong dividend-paying histories like Home Depot and Verizon. It has a 3.48% dividend yield and has averaged an 11.59% annual return over the last 10 years.

What is SCHG, and why should you consider it?
SCHG is the Schwab U.S. Large-Cap Growth ETF, which tracks large companies like Apple, Microsoft, and Nvidia. It’s known for growth, averaging a 16% annual return over the past decade, though it has a lower dividend yield of 0.43%.

How does a stock split affect ETF investors?
A share split doesn’t change the value of your total investment, just the number of shares you hold and the price per share. For example, after the split, SCHD will trade around $28 per share instead of $85, and SCHG will trade around $25 instead of $100.

Are there benefits to share splits for investors?
Yes! Share splits increase affordability and accessibility for retail investors, especially those who cannot buy fractional shares. This can also lead to increased liquidity and positive market sentiment. But be aware that the volatility in the market does not guarantee an increase in the return on investment.

Do stock splits impact dividends in SCHD?
No, your total dividend payment remains the same. For example, if you received $0.75 per share before the split, post-split you’ll receive $0.25 per share, but you’ll own more shares, so the total payout stays the same.

When will SCHD and SCHG start trading at their post-split prices?
Both ETFs will trade at their new prices starting October 11, 2024.

How does a stock split differ from a reverse split?
A stock split increases shares and reduces share price. A reverse split consolidates shares, often for struggling companies, to increase the share price and avoid delisting.

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Disclaimer: This content is for entertainment only and does not constitute legal, tax, or financial advice. It is for general informational purposes. The presenter is not a licensed professional. Viewers should consult their attorney, accountant, or financial advisor for advice on specific legal, tax, or financial issues.