SCHD ETF Surges 19.84% YTD as Dividend Stocks Outpace Growth—July 10

The Schwab U.S. Dividend Equity ETF (SCHD) has returned 19.84% year-to-date, significantly outpacing the S&P 500’s 9.89% gain. The fund attracted $13 billion in inflows and now manages nearly $100 billion in assets. With a 0.06% expense ratio and 3.3% SEC yield, SCHD appeals to income investors seeking passive returns, though it faces competition from rising Treasury yields at 4.06%.

Why SCHD is outperforming in 2026

SCHD’s 19.84% YTD return beats the S&P 500 by 10 percentage points, driven by overweights to consumer staples and energy. The quality factor—measured by cash flow to debt, return on equity, dividend yield, and five-year dividend growth—has outperformed broader markets. High-yield dividend stocks have generally outperformed the broader dividend equity universe, and SCHD’s multipronged strategy is capturing this shift.

The fund’s structure and holdings

SCHD tracks the Dow Jones U.S. Dividend 100 Index with 105 holdings and a 0.06% expense ratio—among the lowest in the industry. The top 10 positions represent 40.56% of assets, including Merck (4.14%), ConocoPhillips (4.10%), and Bristol-Myers Squibb (4.26%). Healthcare and consumer staples comprise over 40% of the fund. The index ranks companies on cash flow to debt, return on equity, dividend yield, and five-year dividend growth rate, selecting the top 100.

SCHD versus bond yields and long-term performance

One-year Treasury yields have jumped to 4.06%, creating competition for income investors. A $10,000 SCHD investment generates $320 in annual dividends, while one-year Treasuries yield $406. However, SCHD’s 10-year annualized return of 12.44% exceeds Treasury yields. Over five years, SCHD returned 8.81% annually; over ten years, 12.44%. The fund’s dividend growth rate has a 10.2% compounded annual growth rate, higher than the 6.3% median for all ETFs.

Meyka analysis and investor takeaway

Meyka grades SCHD a B with a Hold suggestion and forecasts $32.45 by year-end 2026, near current levels of $32.26. The RSI of 51.21 signals neutral momentum, while the Stochastic %K at 65.14 suggests overbought conditions. With Meyka’s forecast aligned to current price and analyst consensus pointing to continued dividend strength, the data suggests limited upside but stable income generation for long-term holders.

Final Thoughts

SCHD’s 19.84% YTD gain reflects a structural shift toward dividend stocks as growth slows and yields rise. While Treasury competition is real, the fund’s 10.2% dividend growth rate and Meyka B grade support it as a hold for income investors seeking passive diversification.

FAQs

Disclaimer:

The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.