The Schwab US Dividend Equity ETF (SCHD) has reached a significant milestone, surpassing $100 billion in assets under management. This achievement places it as the second-largest dividend ETF, trailing only the Vanguard Dividend Appreciation ETF (VIG). The fund's growth has been fueled by robust investor inflows and market performance that has outpaced major benchmarks.
Outperformance Amid Tech Skepticism
SCHD has delivered a total return of 21% year-to-date, substantially exceeding the S&P 500's 9.4% and the Nasdaq 100's 13.8%. This outperformance is notable given the fund's minimal exposure to the technology sector, which has been a primary driver of broader market gains. Instead, SCHD focuses on established companies with consistent dividend growth histories, including Abbott Laboratories, UnitedHealth Group, Merck, Home Depot, Amgen, Procter & Gamble, and Coca-Cola. Other top holdings include PepsiCo, Texas Instruments, and Verizon Communications.
The fund's success has attracted significant capital. According to ETF Db data, net inflows have reached $14.7 billion this year, with over $31 billion flowing in over the past three years. This trend underscores investor appetite for dividend-focused strategies, even as artificial intelligence and semiconductor stocks dominate headlines.
Yield Comparison: Not the Highest Payer
Despite its popularity, SCHD's dividend yield of 3.2% is modest compared to other income-generating assets. For context, the 10-year U.S. Treasury bond currently yields 4.60%, and even short-term government bonds offer over 4%. Covered-call ETFs like JEPI and JEPQ provide yields of 8.1% and 10.7%, respectively, while SPYI boasts an 11.87% yield.
However, SCHD offers advantages over these alternatives. Unlike bonds, it provides capital appreciation potential. Compared to covered-call strategies, which cap upside in bull markets, SCHD's total return this year has been stronger. JEPI, JEPQ, and SPYI have all posted total returns below 10% in 2025.
For investors seeking a balance of income and growth, SCHD remains a compelling option. As noted in Josh Brown's picks for top dividend stocks, quality dividend payers can offer resilience across market cycles.
Technical Outlook Points Higher
Chart analysis suggests SCHD may have further upside. The ETF is trading above its 25-day exponential moving average (EMA), and the relative strength index (RSI) has broken above the neutral 50 level within an ascending channel. Most notably, a cup-and-handle pattern has formed, a classic bullish continuation signal. The fund is currently in the handle phase, indicating a potential breakout. If the pattern plays out, SCHD could rise to the $50 level as investors rotate from high-growth tech into value-oriented dividend stocks.
This technical setup aligns with broader market dynamics. As highlighted in three dividend stocks built to weather market storms, defensive sectors often attract capital during periods of uncertainty.
Is SCHD a Buy at Current Levels?
SCHD's milestone underscores its role as a core holding for income-focused investors. Its track record of dividend growth—targeting companies with at least 10 years of consecutive payout increases—provides a foundation of reliability. While its yield is not the highest available, the combination of capital appreciation and steady income has proven effective.
Investors should weigh SCHD's lower yield against its potential for total return and lower volatility compared to some high-yield alternatives. The fund's minimal tech exposure may also serve as a hedge against a potential pullback in that sector. For those building a diversified portfolio, SCHD offers a proven approach to dividend investing.
This article is for informational purposes only and does not constitute financial advice.
