Dividend ETF SCHD Crushed SPY This Year, But The Rise Has A Cost For New Buyers

Many investors buy SCHD so they can stop watching the market. This year, it was the fund worth watching. The Schwab U.S. Dividend Equity ETF (NYSE:SCHD) has returned 34% with dividends since the end of 2025. That is three times the 11% return of the SPDR S&P 500 ETF Trust (SPY).

The rise has a cost for anyone buying now. SCHD’s price has climbed well ahead of its earnings. Its price-to-earnings (P/E) ratio now sits near the top of its own history. The yield that draws people to the fund has also shrunk.

What Carried SCHD

SCHD follows the Dow Jones U.S. Dividend 100 Index. The index picks about 100 high-yielding U.S. companies that have a long record of paying dividends and strong finances. This rule fills the fund with steady businesses. Consumer staples, health care and energy make up 55% of it.

This year, that mix paid off. Energy stocks surged, and the Energy Select Sector SPDR Fund (XLE) is up 53%. Chevron Corp. (CVX) and ConocoPhillips (COP) are among SCHD’s 10 largest holdings. They sit next to Procter & Gamble Co. (PG), Coca-Cola Co. (KO) and Texas Instruments Inc. (TXN).

Broader dividend ETFs rose far less. The Vanguard High Dividend Yield ETF (VYM) is up 16%. The iShares Core Dividend Growth ETF (DGRO) is up 19%.

The Price Ran Ahead Of Earnings

SCHD’s earnings grew, but more slowly than its price. The companies inside the fund lifted their earnings by about 15% this year. Over the same period, the price rose about twice as much.

Investors paid more for each dollar of those earnings, and that gap showed up in the multiple. SCHD’s trailing P/E climbed from 17.0x at the end of 2025 to 19.4x today.

The Highest Price Tag Since 2021

A multiple near 19x would look modest for the S&P 500. For SCHD, it stands out. Since 2017, SCHD has been cheaper than it is today in four months out of five. Its usual P/E over that time is 16.9x.

SCHD has been here before. Its P/E peaked at 22.4x in January 2018. It topped 20x again in early 2021 and then slid for two years. This February, it reached 20.1x, its highest level since then.

Other dividend ETFs are in a similar position. DGRO, VYM and the iShares Core High Dividend ETF (HDV) all trade near the top of their own P/E history. Their multiples were already that high when the year began. SCHD got there in 10 months.

The S&P 500 went the other way. Its earnings grew faster than its price. SPY’s P/E fell from 28.0x to 23.4x this year, which is almost exactly its median since 2017.

What It Means For Income

For a dividend fund, a higher multiple shows up as a lower yield. SCHD’s dividend per share is about 2% higher than at the end of 2025. Its price rose much faster, so its yield over the past 12 months fell from 3.7% to 2.9%.

In dollar terms, $10,000 invested in SCHD at the start of the year bought about $375 a year in dividends at that yield. The same $10,000 today buys about $293.

The fund still holds what its buyers came for. It owns established companies that pay dividends and grew their earnings this year. What a buyer takes on now is a price that depends on that growth continuing. About a sixth of SCHD is in energy, and energy earnings rise and fall with the price of oil.

This year, SCHD paid its holders in price. From here, it has to pay them in earnings.

Author’s Disclosure: Data as of 2 November 2026. This is not investment advice or a recommendation to buy or sell any security. ETF Copilot receives no compensation from the issuers of the funds mentioned. Managers of ETF Copilot may or may not hold positions in the funds mentioned.

First published in the ETF Copilot newsletter.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.