SCHD's Healthcare Holdings Raise Questions Amid Patent Expirations

The Schwab U.S. Dividend Equity ETF (SCHD) holds 100 of the highest-quality, high-yielding dividend stocks and has a 20.7% allocation to healthcare stocks.

However, what's surprising is that two seemingly high-quality healthcare dividend stocks, Johnson & Johnson and Medtronic, are not among its holdings.

The fund's top healthcare holding is Merck, which faces notable headwinds due to the loss of its biggest revenue driver, Keytruda, in 2028.

Despite these concerns, the fund has invested heavily in R&D and acquisitions to get past this patent cliff.