SCHD's Stunning Reversal: Schwab's Flagship Dividend ETF Is Up 29% and Climbing
Key Points
Investors are increasingly seeking stable income amid geopolitical and economic uncertainty.
SCHD holds financially strong companies that can support sustained growth and appreciation.
With holdings across various sectors, SCHD helps reduce the risk when a single sector struggles.
- 10 stocks we like better than Schwab U.S. Dividend Equity ETF ›
Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is enjoying a massive breakout year, trading at roughly $34 at this writing and boasting a year-to-date (YTD) return of 29.29%. A look at SCHD's returns since its 2011 inception shows a steady record of healthy returns, but nothing quite like what the fund has experienced this year. For example:
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Returns, Including Dividends |
|---|---|
|
10 years |
13.17% |
|
Five years |
10.01% |
|
One year |
29.53% |
|
YTD |
29.29% |
Data source: Schwab Asset Management
For years, SCHD was respected and steady, but hardly spectacular. Between 2021 and 2025, the fund produced solid returns, but not enough to keep pace with the more impressive megacap tech surge. However, 2026 has been SCHD's year, with returns vaulting it into a leadership position among dividend-paying exchange-traded funds (ETFs).
Data source: Getty Images.
What changed for 2026?
Notably, the dividend fund now holds a double-digit lead over the S&P 500, which has a YTD return of roughly 11%.
So, why the uptick in SCHD's value? It has to do with several macro and market forces, including:
- Shift from growth to value: Investors, tired of paying high prices for AI and megacap tech stocks, are moving money into cheaper, less volatile companies that pay dividends, which is precisely what SCHD holds. Add current geopolitical instability and tariffs, and it's easy to understand why investors are looking for safer havens.
- Underweight megacap tech: SCHD holdings don't include many of the giant tech names that have struggled so far this year. Without those holdings, the fund wasn't hurt when the tech sector cooled. Instead, SCHD's top holdings include companies like Abbott Labs, Amgen, ConocoPhillips, Chevron, and Home Depot.
- March 2026 changes: SCHD's index was refreshed in March, adding more large, high-quality dividend names like UnitedHealth, Procter & Gamble, and Accenture to a roster that already included winners like Qualcomm and Texas Instruments. The additions helped boost returns.
SCHD appeals to investors due to its strong returns, healthy dividend yield, and low fees. Put simply, the ETF is having a winning year because the market currently favors the types of solid, dividend-paying companies SCHD is laser-focused on.
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Dana George has positions in Procter & Gamble. The Motley Fool has positions in and recommends Abbott Laboratories, Accenture Plc, Amgen, Chevron, Home Depot, Qualcomm, and Texas Instruments. The Motley Fool recommends ConocoPhillips and UnitedHealth Group and recommends the following options: long January 2028 $260 calls on Accenture Plc and short January 2028 $280 calls on Accenture Plc. The Motley Fool has a disclosure policy.
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