Forget the S&P 500: SCHD Is Beating It by Nearly 10 Points in 2026 and Its Dividend Just Grew

SCHD has quietly pulled ahead of SPY by a wide margin in 2026, but the longer you zoom out, the more complicated the story gets. Before you shift your portfolio, there are tax consequences and a decade of data worth…

The ETF Examiner desk. Editor: Ryne Mauck.

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For most investors, U.S. large-cap exposure means an S&P 500 fund such as the SPDR S&P 500 ETF (NYSEARCA:SPY). That makes sense. SPY holds the 500 largest American companies in one liquid fund and has been a reliable compounding core for decades. In 2026, though, SPY has fallen behind. Based on data from October 2, 2026, the Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) is up 22.18% year-to-date. SPY is up 12.52%. SCHD leads by 9.66 points. And SCHD’s latest quarterly distribution also came in above the prior quarter’s.

SCHD’s latest quarterly distribution was $0.2665 per share. It went ex-dividend on September 23, 2026, and paid on September 28, 2026. If you buy today, you have already missed that payment and will collect starting with the next one.

At $32.71 a share, quoted on October 2, 2026, $100,000 buys 3,057.17 shares. At the latest rate, that position would receive $814.74 in a single quarter. The annualized forward figure is $3,258.94. These numbers let an income investor see what the fund pays in dollars before deciding whether that cash flow matters to them.

The latest distribution of $0.2665 was higher than the prior quarter’s $0.2525. The increase came from the fund’s holdings. SCHD tracks an index and passes along the dividends its companies pay, minus fund expenses. When those companies pay more, holders get more.

The fund’s underlying index screens for companies with long dividend records and solid finances, so a rising payout is the strategy doing what it was built to do. That said, quarterly payouts are uneven, and one higher quarter does not prove a trend.

Over longer periods, the result flips. In the past five years, SCHD’s price rose 56% while SPY’s rose 76.7%. Over ten years, SCHD gained 226.11%, and SPY gained 255.59%.

SCHD’s edge is recent. Over the past year, it leads 22.96% to 14.79%, a gap of roughly 8 points. Over the five- and ten-year records, SPY wins. Treating this year’s performance as the new normal means arguing against a decade of results.

Anyone buying on the year-to-date figure should check the recent trend. Over the past month, SCHD fell 5.28% while SPY rose 0.72%. Over the past week, SCHD slipped 1.18% and SPY edged up 0.02%. A month is too short to say much about the long run. Still, the rally that produced the year-to-date gap appears to have potentially stalled.

For those wanting to switch between SPY and SCHD, selling SPY in a taxable account can create a capital gains bill, and after a decade of solid returns, that bill could be large. Some options to consider

A swap also changes your risk. SPY weights companies by market value, which tilts it toward the largest growth stocks. SCHD, on the other hand, holds only dividend payers, so you give up some of the market’s fastest growers for income. In a taxable account, SCHD’s quarterly distributions also create a tax bill each year in a taxable account, whether or not you need the income.

SCHD makes sense for investors who want quarterly income that grows as American companies raise their dividends, and who accept that this year’s lead may not last. Investors who want the market’s long-run return have a decade of evidence supporting SPY. For that goal, the longer record favors SPY, and one strong year for SCHD has not changed that record.

Contact [email protected] for any questions or corrections.

Ryne Mauck is an investment writer covering exchange-traded funds, retirement planning, and portfolio strategy. Through his work at 24/7 Wall St. and other investment platforms, including Seeking Alpha, he aims to provide clear, research-driven insights that help investors make more informed decisions while maintaining a long-term approach to investing.

Ryne holds a B.Sc. in Finance and an M.A. in Political Science. He is a formerly registered Municipal Advisor Representative and has passed the Series 50, Series 63, and Series 65 exams. His articles are not intended to be, nor should they be interpreted as, financial advice.

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