How SCHY ETF Held Up While Stocks Fell

Beyond owning different stocks, true diversification is owning something that zigs when the market zags.

Watching the S&P 500 fall 18.8% is a tough experience for any investor. It’s that familiar knot in the stomach as the red on the screen spreads. But during that same period, one fund, the Schwab International Dividend Equity ETF (SCHY), returned just -4.2%. This is an equity fund, designed to track an index of international companies known for their substantial dividend yields. It keeps you invested in stocks, but its record suggests it does so with a calmer disposition than the broader market.

How Has It Held Up In Selloffs?

The real test of a defensive holding is its behavior during a storm. Across the last four S&P 500 drawdowns, SCHY held up in 3 of them. The sharpest contrast came in a 2025 selloff when the S&P 500 fell 18.8% while SCHY returned -4.2%. That’s the kind of resilience that can cushion a portfolio. In another drop in 2024, the S&P 500 fell 8.4% while this fund returned -1.3%.

A Defensive Position Within Stocks?

SCHY offers a specific kind of defense: it keeps you in the stock market, not out of it. The fund is built on an index of companies outside the United States that offer substantial dividend yields. These are often mature, stable businesses that can be less volatile than the market as a whole. The numbers bear this out: over the past year, SCHY has run at about 12% annualized volatility, compared to about 13% for the S&P 500. This focus on international dividend payers is a different approach than some popular U.S. dividend funds. It’s a way to stay invested for potential growth but in a corner of the market that has historically weathered downturns more smoothly.

But Does It Win Every Time?

No defender is perfect, and it’s important to be clear-eyed about that. While the fund has a strong record, it hasn’t held up in every single market drop. During a steep 2022 selloff, the S&P 500 fell 25% and SCHY returned -22%. In that instance, it fell nearly in lockstep with the market. Past defense, even when consistent, does not promise future defense.

The Real Question For Your Portfolio

The market is under pressure again, with the S&P 500 sitting about 4.0% below its recent three-month high. The point here isn’t to predict what comes next or to tell you what to do. It’s to ask a practical question about your own portfolio: when the market falls, do you own anything that actually cushions the drop? Looking at the historical behavior of an asset like SCHY can help clarify what that kind of defense looks like in practice.

Is There A Stronger Defender Than This?

Knowing SCHY held up is a start, but it raises the sharper question: is it the best at this, or does another fund cushion a selloff even more for less of a trade-off? That is worth checking before you lean on any single defender.

Our Drawdown Defenders screen answers it directly. It ranks the funds that held up across the recent S&P 500 sell-offs by how far they beat the S&P during those drops, how many of the sell-offs each one defended, and what they have actually returned since, with annualized return, volatility, Sharpe and Sortino all measured over the same stretch. It leans toward the defenders that kept their upside too, not just the funds that sat out the drop, so you can see where SCHY sits and which funds protected without giving up as much. For the wider picture on valuation and long-run performance, the ETF Valuation and Performance Scorecard ranks the major funds side by side.

A Fund Is Only Part Of Your Portfolio, Check The Rest

A fund is just one piece of what you own, and the same scrutiny applies to every other position in your portfolio. How much damage any single position could do to your net worth is a question with a precise answer. The Trefis Wealth team computes it for investors professionally, with the same rules-based systematic discipline that runs our High Quality Portfolio. Request a free vulnerability audit of your biggest positions.