The Hidden Cost of Dividend ETFs No One Talks About



Let me ask you something: When’s the last time you actually opened up an ETF and looked at what you’re buying?

Not just the name. Not just the yield. I mean really dug into the holdings and asked yourself if you want exposure to all of it — or if you already own half of it in your portfolio.

I was talking about this recently with Schwab U.S. Dividend Equity ETF (SCHD). 

It’s popular. People love it. But here’s the thing: If you already have the top holdings, you wouldn’t want SCHD.

You’re just doubling up on exposure you already have — and paying a fee for the privilege.

SCHD was heavy on Home Depot (HD). They changed this around and lowered that. 

And then there’s Lockheed Martin (LMT) — that’s been a dog of a stock.

So why would I pay someone to stick me with that?

ETF Evaluation Tips: It’s always good to look at the holdings before you buy any ETF. See what they’re giving you. See what they’re charging you, and see what you already own.

The Better Way: Build It Yourself

Here’s what I do now: You can build your own ETF just by buying fractional shares for $50. You don’t even have to buy a whole share. 

Platforms make it simple and cheap.

Think about that. Commission-free trading. No fee. You can build your own little ETF and skip the crap and just put the ones in there you want.

No LMT. No redundant HD. Just the stocks that fit your strategy.

You get full control. You avoid the management fee. You stop paying for exposure you didn’t ask for. You decide what belongs and what doesn’t — not some committee that doesn’t know your goals.

Do Your Homework First

It’s always good to look at the holdings before you buy any ETF. See what they’re giving you. See what they’re charging you.

And then ask yourself: Could I do this better on my own?

Most of the time, the answer is yes.

Once you start digging into what you’re actually paying for, you see how much of it you could recreate yourself with cleaner exposure and a clearer strategy.

Trade well,

Jack Carter
Jack Carter Trading 

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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. 

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