Motley Fool Says SCHD Still Merits a Look After 2026 Rally

The Motley Fool says investors may still consider putting $1,000 into Schwab U.S. Dividend Equity ETF (SCHD), despite a strong run this year. The fund closed at $33.74 on September 22, putting a $1,000 investment at roughly 29 shares, before any trading costs.

The Motley Fool cited a 22.8% year-to-date gain for SCHD, compared with 11.8% for the S&P 500. Its argument is that persistent inflation, high interest rates and investor demand for value stocks may keep supporting dividend payers. Those are market conditions, not a guarantee the fund will keep beating broader indexes.

SCHD tracks the Dow Jones U.S. Dividend 100 Index. Schwab says the index selects companies using measures of financial strength and dividend quality. The ETF held 102 stocks as of September 22, including Qualcomm, Texas Instruments and Coca-Cola among its largest positions.

That focus can appeal to investors seeking income, but it also means SCHD is not a full-market fund. Its screening favors established dividend payers, leaving less exposure to companies that do not pay dividends or whose shares are driven by fast growth.

Schwab reported a 3.00% trailing distribution yield as of August 31. At that rate, a $1,000 holding would generate about $30 over a year, though distributions can change and are not guaranteed. The fund’s 0.06% annual expense ratio amounts to about 60 cents per $1,000 invested.

The key question is whether SCHD’s role fits an investor’s broader portfolio. Its dividend screen and value tilt may complement a broad-market fund, but recent gains alone do not show that it will outperform from here. Schwab also warns that the fund’s share price and principal value can fall, and past performance does not predict future results.

Investors weighing a purchase can compare SCHD’s yield and concentration with a broad U.S. stock fund, and consider whether they want cash distributions or prefer more growth exposure. The decision is less about chasing this year’s rally than choosing a long-term mix they can hold through market declines.