The Schwab U.S. Dividend Equity ETF (SCHD) has regained its footing in 2026, emerging as a leader in the dividend ETF space after a challenging period dominated by megacap tech stocks. The fund’s robust screening process focuses on balance sheet fundamentals, dividend history, and yield, which has historically positioned it well for long-term growth. However, as tech and AI stocks surged, SCHD’s performance lagged until recent market shifts prompted a renewed interest in defensive and value stocks.
This shift is significant for investors as the S&P 500 is projected to achieve a remarkable 27% year-over-year earnings growth in Q1, the best since 2021. While SCHD has posted a 17% year-to-date gain, the momentum appears to be favoring tech and growth sectors again, raising questions about the ETF’s ability to outperform in the current environment.
Investors should consider SCHD as a solid long-term income option, but they may need to adjust their expectations regarding its performance relative to more aggressive growth-focused ETFs this year.
Source: fool.com