Is the Schwab US Dividend Equity ETF a Buy Now?
Key Points
The Schwab US Dividend Equity ETF is up about 12% year to date.
The ETF just underwent its annual reconstitution last week and saw a surge of inflows.
Is this ETF a buy right now?
- 10 stocks we like better than Schwab U.S. Dividend Equity ETF ›
An exchange-traded fund (ETF) that is beating the market by 16 percentage points right now is hard to ignore, especially with the S&P 500 down 3.7% year to date.
Thatʻs a big reason why the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) has seen some $16.9 billion in net inflows over the past month, according to ETF Database.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
The Schwab U.S. Dividend Equity ETF is up 12.2% year to date, while the Nasdaq Composite is down nearly 6%. That is significant outperformance. The question is, can it continue?
Image source: Getty Images.
Big surge of inflows for reconstitution
The Schwab U.S. Dividend Equity ETF is one of the most popular dividend ETFs on the market. With some $98 billion in assets under management, it is the second largest dividend ETF, behind the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) with about $100 billion in assets.
The ETF tracks the Dow Jones U.S. Dividend 100 Index. This index includes 100 stocks that have maintained dividend payments for at least 10 years in a row, meet certain liquidity standards, and have the highest dividend yields and five-year dividend growth rates, among other criteria.
The index is reconstituted annually on the third Friday in March. This year, that was last Friday, March 19. On that day, there was a huge spike in inflows -- roughly $15 billion, according to ETF Database -- as investors looked to tap into the changes in the index.
Currently, as of March 23, the three largest holdings are Chevron, ConocoPhillips, and Verizon.
Time to buy?
This dividend ETF has outperformed the market on a return basis by a wide margin, with a 12% return so far this year, but it also has a high distribution yield of 3.3% over the past 12 months. That will put income into your pocket or boost the outperformance further if reinvested back into the ETF.
With the war in Iran continuing to be a drag on already overvalued markets, along with rising gas prices and elevated inflation, investing in an ETF of stable companies that consistently pay dividends remains a smart option. Plus, this ETF was just reconstituted, adding in the best high-yield stocks right now, and swapping out those that lagged.
A great dividend ETF like the Schwab US Dividend Equity ETF should always have a place in a portfolio, but right now, its value is even greater.
Should you buy stock in Schwab U.S. Dividend Equity ETF right now?
Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $490,325!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,074,070!*
Now, it’s worth noting Stock Advisor’s total average return is 900% — a market-crushing outperformance compared to 184% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of March 25, 2026.
Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron and Vanguard Dividend Appreciation ETF. The Motley Fool recommends ConocoPhillips and Verizon Communications. The Motley Fool has a disclosure policy.
Recommended Articles
