𝐑𝐔𝐒𝐒 𝐊𝐍𝐎𝐏𝐅

🚨 SCHD’S Q2 REBALANCE IS COMPLETE $SCHD rebalances quarterly on the third Friday of June, September, and December. Unlike the annual reconstitution that takes place each March, the quarterly rebalance is not about adding or removing stocks. Instead, it’s primarily about redistributing weight across the portfolio by trimming positions that have grown too large (above 4% cap/stock) and reallocating that weight throughout the fund. See the image below for a quick overview of how the new Top 10 compares to the old. NEW TOP TEN HOLDINGS After the rebalance, the new Top 10 holdings are: $UNH 4.36% 🟢⬆️ 2 spots (from #3) $TXN 4.35% 🔴⬇️ 1 spot (from #1) $PG 4.26% 🟢⬆️ 2 spots (from #5) $HD 4.22% 🟢⬆️ 4 spots (from #8) $AMGN 4.12% 🟢⬆️ 4 spots (from #9) $KO 4.08% 🔴⬇️ 2 spots (from #4) $ABT 4.07% 🟢⬆️ 6 spots (from #13) $MRK 4.07% 🔴⬇️ 2 spots (from #6) $PEP 3.99% 🟢⬆️ 2 spots (from #11) $VZ 3.93% ⚪➖ Unchanged (#10) The biggest cuts were to Technology: $TXN: 6.39% → 4.35% $QCOM: 6.22% → 3.59% Combined, those two holdings went from 12.61% of fund assets to just 7.94%. That’s a reduction of 4.67 percentage points from two stocks alone. Outside the Top 10, $QCOM experienced one of the biggest drops: 🔴⬇️ $QCOM fell from #2 to #12 At the same time, SCHD increased exposure to several defensive dividend names: $ABT: 3.13% → 4.07% $PG: 3.80% → 4.26% $PEP: 3.47% → 3.99% $AMGN: 3.56% → 4.12% $HD: 3.63% → 4.22% $MRK: 3.79% → 4.07% The rebalance also reduced concentration risk. Top 5 holdings: 25.98% → 21.31% Top 10 holdings: 44.26% → 41.13% Another notable change is that the largest holdings are now much more balanced. Before the rebalance, SCHD had three holdings above 5.5%: $TXN 6.39% $QCOM 6.22% $UNH 5.50% After the rebalance, no holding is above 4.36%. NEW SECTOR ALLOCATION Sector allocation also became more defensive: Healthcare: 19% → 20% Staples: 19% → 20% Energy: 14% → 15% Technology: 15% → 10% Industrials remained 11% Financials remained 10% Discretionary remained 7% Comm remained 6% Key Takeaways ✅ Reduced the oversized tech exposure in $TXN and $QCOM ✅ Increased exposure to defensive names like $ABT, $PG, $PEP, $AMGN, $HD, and $MRK ✅ Lowered concentration risk in the largest holdings ✅ Made the top of the portfolio more balanced, with no holding above 4.36% versus three holdings above 5.5% before For $SCHD investors, the most important change was probably the reduction of $TXN and $QCOM from a combined 12.6% of assets to 7.9%, while spreading that weight across healthcare, consumer staples, and other holdings throughout the portfolio. What do you think of the rebalance?