Schwab U.S. Dividend Equity ETF SCHD

$SCHD What is the concensus on the reformulation? Lower tech sector and energy, raise consumer staples for more “protective” year?

Schd/Schwab US Dividend Equity ETF (SCHD)

SCHD is very well-known among dividend investors, and that is for good reason. This ETF rarely disappoints.

Year-to-date, it is already up 13.5%. It can end the year on a strong note at this pace, as investors are de-risking their portfolios and are buying into stocks held by this fund. SCHD gives you something no other equity ETF does yet: a 3.3% dividend yield, ultra-low 0.06% expense ratio, along with good upside prospects.

Holding SCHD for decades can snowball your holdings and boost your retirement portfolio considerably. This ETF does not have significant tech exposure. Stocks from the Technology sector constitute only 9.69% of this fund. I believe this can turn into a major advantage this year if investors keep prioritizing value and safety.

The Schwab U.S. Dividend Equity ETF always had a great strategy

To quickly review, this ETF tracks the Dow Jones U.S. Dividend 100 Index. The index's methodology considers a company's fundamentals, balance sheet health, dividend history, and yield. Stocks that demonstrate the best combination of these factors get selected for the final portfolio.

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SCHD
NYSEMKT: SCHD
Schwab U.S. Dividend Equity ETF
Today's Change
(0.86%) $0.27
Current Price
$31.61

I've always believed this fund has one of the best, most well-constructed strategies among all dividend ETFs. Even the best strategies, however, sometimes fall out of favor. That's exactly what happened with this one. As equity markets continued to be driven higher by a narrow subset of megacap tech stocks, funds like this one, which focused on durable, boring, cash-rich companies that paid dividends, were left behind.

But if the significant market rotation that we've seen over the past several weeks is sticky, there's no reason to believe that the Schwab U.S. Dividend Equity ETF couldn't be a leader.

In fact, it already is! In 2026 so far (as of 2/6/26), it's the best-performing dividend ETF in the entire marketplace.

Schd/The Schwab U.S. Dividend Equity ETF always had a great strategy

To quickly review, this ETF tracks the Dow Jones U.S. Dividend 100 Index. The index's methodology considers a company's fundamentals, balance sheet health, dividend history, and yield. Stocks that demonstrate the best combination of these factors get selected for the final portfolio.

Will AI create the world's first trillionaire?
One little-known company, called an "Indispensable Monopoly" owns the technology Nvidia, AMD, and Intel cannot function without. And it is still just a fraction of Nvidia’s size.

We just released a brand-new report with the full story and the company’s name.

Continue ›

Expand
SCHD
NYSEMKT: SCHD
Schwab U.S. Dividend Equity ETF
Today's Change
(0.86%) $0.27
Current Price
$31.61

I've always believed this fund has one of the best, most well-constructed strategies among all dividend ETFs. Even the best strategies, however, sometimes fall out of favor. That's exactly what happened with this one. As equity markets continued to be driven higher by a narrow subset of megacap tech stocks, funds like this one, which focused on durable, boring, cash-rich companies that paid dividends, were left behind.

But if the significant market rotation that we've seen over the past several weeks is sticky, there's no reason to believe that the Schwab U.S. Dividend Equity ETF couldn't be a leader.

In fact, it already is! In 2026 so far (as of 2/6/26), it's the best-performing dividend ETF in the entire marketplace.

Schd/cleaver has a stinky beaver!

Schd/KEY POINTS

Unlike some income-focused ETFs, the Schwab U.S. Dividend Equity ETF doesn’t limit upside potential.
The fund is highly concentrated in value-oriented sectors such as energy, consumer staples, and healthcare.
The Schwab U.S. Dividend Equity ETF is best used as a core passive income holding rather than a trading tool.
10 stocks we like better than Schwab U.S. Dividend Equity ETF ›

SCHD/KEY POINTS

Unlike some income-focused ETFs, the Schwab U.S. Dividend Equity ETF doesn’t limit upside potential.
The fund is highly concentrated in value-oriented sectors such as energy, consumer staples, and healthcare.
The Schwab U.S. Dividend Equity ETF is best used as a core passive income holding rather than a trading tool.
10 stocks we like better than Schwab U.S. Dividend Equity ETF ›

Schd/Value stocks are crushing growth stocks in 2026, benefiting the Schwab U.S. Dividend Equity ETF.

When I picked the Schwab U.S. Dividend Equity ETF (
SCHD
+1.09%
) as a great buy for passive income investors in December, I certainly didn't expect it to rocket 14.7% higher less than six weeks into the new year, especially considering the S&P 500 (
^GSPC
+0.37%
) is only up 1.3%.

Here's why this seemingly stodgy exchange-traded fund (ETF) is roaring to new heights and why it could still be a buy now.

A smartly dressed investor smiles while holding cash and sitting in front of a laptop in an outdoor setting.
Image source: Getty Images.

A high-yield ETF concentrated in value-focused sectors

Investors gravitate to the Schwab U.S. Dividend Equity ETF for its high yield, which is 3.5% at the time of this writing but was over 4% at certain points last year before the fund's recent run-up. The ETF offers investors a way to participate in the stock market and generate a high yield from a basket of stocks while incurring a mere 0.06% expense ratio, or $6 for every $10,000 invested. The fund has a significantly higher yield than other popular, low-cost ETFs. For example, the Vanguard High Dividend Yield ETF yields just 2.3%.

Some ETFs achieve higher yields by investing in a mix of stocks and bonds, or by selling covered calls on their equity holdings, which increases passive income but also caps upside. What makes the Schwab U.S. Dividend Equity ETF unique is that it is 100% invested in stocks. And it achieves its high yield by targeting sectors with industry-leading companies that prioritize returning capital to shareholders through dividends.

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A staggering 54.6% of the ETF is invested in the energy, consumer staples, and healthcare sectors -- all of which are chock-full of high-yield stocks. By comparison, the S&P 500 allocates only 17.6% to these three sectors.

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In recent years, the Schwab U.S. Dividend Equity ETF has underperformed the S&P 500 because it is underweight sectors like technology and communications that have been driving broader market returns. But so far in 2026, it's the stodgy sectors that are in the spotlight.

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The energy sector -- which makes up 19.9% of the Schwab U.S. Dividend Equity ETF -- is crushing the S&P 500 in 2026. Consumer staples are also one of the best-performing sectors, whereas technology and communications have incurred minor sell-offs.

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SCHD
NYSEMKT: SCHD
Schwab U.S. Dividend Equity ETF
Today's Change
(1.09%) $0.34
Current Price
$31.64

Achieving a high yield without compromising on diversification

Despite its recent run-up, there are plenty of reasons why the Schwab U.S. Dividend Equity ETF remains a solid buy now. The fund is heavily concentrated in large-cap stocks, with around 90% of the ETF invested in companies with market caps of at least $15 billion. What's more, the largest holding in the fund, which is Lockheed Martin, makes up 4.6% of the ETF. The fund is well balanced across industry leaders rather than relying on a handful of stocks to drive gains.

This is a fundamentally different strategy from market-cap weighted sector-focused ETFs. For example, the Vanguard Energy ETF has a high yield of 2.8%, but 38.2% of the fund is invested in just ExxonMobil and Chevron, which may not appeal to investors looking for more diversification.

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Similarly, 45.2% of the Vanguard Consumer Staples ETF is invested in just four stocks -- Walmart, Costco Wholesale, Procter & Gamble, and Coca-Cola.

In addition to being highly diversified, the fund is still a good value, with a price-to-earnings ratio under 20. Although many energy and consumer staples stocks have run up so far this year, many of them still have low valuations.

The energy sector as a whole, even industry-leading names like ExxonMobil and Chevron, has historically traded at a discount to the S&P 500 due to the volatility of oil and gas prices and investor concerns about the future of oil and gas in a lower-carbon world.

Entering 2026, stocks like Procter & Gamble and Coca-Cola were trading at discounts to their historical valuations. Now, both stocks are closer to their average valuations.

Maintain a long-term focus

The investment thesis for the Schwab U.S. Dividend Equity ETF didn't change when the calendar turned to 2026. Rather, some short-term-minded investors are rotating out of high-growth sectors and into safer, dividend-paying value sectors. Tech stocks are under pressure as investors scrutinize capital expenditures and the payoff of artificial intelligence (AI) spending.

Schd-Austin dip shit has to be from
A foreign country!

Schd/ is an income stock you retard!