Schwab U.S. Dividend Equity ETF leads with 17.5% YTD return amid tech sector pullback and quality factor strength.
Dividend-focused ETFs have surged in 2026, with the Schwab U.S. Dividend Equity ETF (SCHD) posting a 17.5% year-to-date return, outpacing the Vanguard S&P 500 ETF’s 10% gain. The WisdomTree U.S. Total Dividend ETF also outperformed, rising nearly 11%, while the Vanguard High Dividend Yield ETF delivered 11.4%.
Tech stocks, the top-performing S&P 500 sector earlier this year, have shown signs of weakness. Semiconductor stocks, tracked by the VanEck Semiconductor ETF, are down over 10% from their highs, and key names like Nvidia and Microsoft have retreated. Meanwhile, high-yield dividend stocks and quality factors, represented by the Invesco S&P 500 Quality ETF, have outperformed the broader market by about six percentage points.
The Schwab ETF’s success stems from its exposure to consumer staples and energy, sectors that have benefited from recent market shifts. Analysts suggest dividend stocks could extend gains if the rotation away from growth and tech continues.