The Schwab US Dividend Equity ETF (SCHD) has been on a tear this year, reaching an all-time high of $36.38, up more than 30% year-to-date. The rally is fueled by a broader market rotation away from high-flying artificial intelligence (AI) stocks and into more traditional, dividend-paying companies. With demand for blue-chip dividend ETFs accelerating, the fund's momentum could continue in the coming weeks.
Inflows and Performance Surge
SCHD has climbed over 35% from its December low, outperforming both the S&P 500 and the Nasdaq 100 for the first time in years. Investors have poured money into the fund, with inflows exceeding $2.7 billion in the last 30 days alone. Year-to-date, inflows have topped $26 billion, pushing the fund's assets under management to $120 billion—making it the largest dividend ETF globally.
The fund's composition is a key driver of its success. Its top holdings include consumer non-durables, health technology, energy, and finance companies. Notable names include Procter & Gamble, Texas Instruments, Coca-Cola, Home Depot, Amgen, PepsiCo, Chevron, and Abbott Laboratories. These are established firms with limited exposure to the data center and AI boom. Instead of developing AI models, they are leveraging AI tools to reduce costs—for instance, healthcare companies using AI to accelerate drug discovery.
The energy sector has also contributed to SCHD's strong performance. Major holdings like Chevron, ConocoPhillips, EOG Resources, and OneOK have benefited from a double-digit rise in crude oil and natural gas prices this year.
SCHD vs. Government Bonds
Investors often compare SCHD's dividend yield of 2.94% with U.S. government bond yields, which are currently much higher. The 10-year Treasury yield stands at 4.99%, while the 30-year and 5-year yields are at 5.35% and 4.82%, respectively. However, on a total return basis, SCHD is likely to remain competitive over the long term. For example, a $100,000 investment in the 10-year Treasury would generate about $4,870 in interest over the next year, while the same amount in SCHD would yield roughly $3,200 in dividends. But SCHD also benefits from price appreciation—its total return over the past 12 months has exceeded 30%.
Technical Analysis Points to Further Gains
The daily chart shows SCHD hovering near its all-time high after breaking above the key resistance level of $35.30, its August peak. The ETF has since retested that level, confirming a break-and-retest pattern. It is trading above all major moving averages and the Supertrend indicator, while momentum oscillators like the RSI and MACD continue to trend higher. The next target is the $40 resistance level, with confirmation if the price moves above the current record of $36.
Given the strong inflows, favorable sector rotation, and supportive technicals, SCHD appears well-positioned for continued upside. However, investors should remain mindful of broader market conditions and interest rate movements.
This article is for informational purposes only and does not constitute financial advice.
