By Ian Salisbury

With uncertainty rocking the market, one of the biggest dividend exchange-traded funds just dramatically boosted its bet on energy. With nearly $70 billion in assets, Schwab US Dividend Equity is the second-largest fund of its type, and investors over the past few weeks funneled more than a net $2 billion into it, says FactSet.

On March 21, the fund nearly doubled its energy-stock exposure to 21% from 12%; its largest holding is ConocoPhillips at 4.7%. The move was part of an annual "reconstitution," meant to keep its portfolio on target with its investment objectives.

Energy stocks are off 7.4% this year after the selloff, beating the S&P 500's 13.5% fall. But with shares closely tied to commodity prices, they can be risky. A State Street Global Advisors study found energy to have the highest five-year volatility of any sector. Meanwhile, oil prices are down, OPEC may lift production, and steel tariffs are adding to costs.

CFRA analyst Aniket Ullal says there's nothing inherently wrong with the approach, but risk-averse investors might opt for funds such as the Vanguard Dividend Appreciation ETF or the iShares Core Dividend Growth ETF, which focus on companies that have raised dividends rather than those with the highest yields; energy is less than 6% at both. The Schwab ETF's yield is 3.8%, compared with 1.8% for Vanguard Dividend and 2.3% for iShares Core Dividend. "You will get higher yields, but you are taking on more risk." he warns.

Write to Ian Salisbury at ian.salisbury@barrons.com

Last Week

Markets

Global stocks fell ahead of President Donald Trump's "Liberation Day" tariffs. Gold rose while Treasury yields slipped. In the U.S., the S&P 500 lost 4.6% for the quarter, and the Nasdaq 100, 8.3%, with Nvidia down 19% and Tesla, 36%. The tariff announcement -- 10% on all imports, but more on China, Vietnam, Japan, and the European Union, though not Russia, or on chips -- sent the S&P down another 4.8%. Retaliation (34% China levies on U.S. goods) and negotiations began. March job growth was solid, but the dollar fell. On the week, the Dow industrials plunged 7.9%; the S&P 500, 9.1%; the Nasdaq Composite, 10%.

Companies

Biotech and vaccine stocks crashed after a top Food and Drug Administration official was ousted; job cuts hit Health and Human Services. Stocks with big Asian exposure -- including Apple -- took a beating after U.S. tariffs. The White House froze funding at Harvard, Princeton, and Brown. SoftBank agreed to lead a $40 billion OpenAI funding round for a $300 billion valuation. First-quarter Tesla deliveries fell 13% year over year.

Deals

Elon Musk's artificial-intelligence company, xAI, bought X, the former Twitter, for $33 billion...Right-wing channel Newsmax went public at $10 a share, saw its stock rise over 700% before tumbling... Rocket Cos. said it would buy mortgage servicer Mr. Cooper Group for $9.4 billion...Pressured by China, CK Hutchison didn't sign the deal selling ports to a BlackRock-led group...The White House delayed the TikTok decision.

Next Week

Wednesday 4/9

The higher tariff rates on certain countries announced by the White House on April 2 go into effect. The 10% baseline tariff rate for all countries was effective as of April 5. The higher levies include a 34% rate on imported goods from China, 24% from Japan, and 20% from the European Union. China has announced 34% duties on all U.S. goods that go into effect on April 10, leaving a very small window for negotiations.

The Federal Open Market Committee releases the minutes from its mid-March monetary-policy meeting. At that meeting the central bank left the federal-funds rate unchanged at 4.25%-4.5%.

Thursday 4/10

The Bureau of Labor Statistics releases the consumer price index for March. Economists forecast a 2.6% year-over-year increase, two-tenths of a percentage point less than in February. The core CPI, which strips out volatile food and energy prices, is seen rising 3%, compared with 3.1% previously.

Friday 4/11

The unofficial start of first-quarter earnings season commences with the big banks and brokerages reporting. BlackRock, JPMorgan Chase, Morgan Stanley, and Wells Fargo all release results before the opening bell.

The Numbers

230

Number of new U.S. ETF products introduced in the first quarter, a record going back to 2015.

37%

Decline in revenue at China property giant Country Garden in 2024. Losses narrowed, to $6.1 billion.

7.4

How many times larger Nvidia's average revenue per employee ($3.62 million) is to Intel's ($490,000).

11 M

The number of American households with backyard chickens, up from 5.8 million in 2018.

Write to Robert Teitelman at bob.teitelman@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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April 04, 2025 20:51 ET (00:51 GMT)

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