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

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.

What a $100,000 SCHD Position Pays in Cash

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.

Why SCHD’s Payout Rose Last Quarter

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.

A Decade of Returns Points Back to SPY

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.

Momentum Has Turned in the Past Month

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.

How to Weigh a Move Without Paying Unneeded Taxes

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:

• Changes made inside an IRA or 401(k) don’t trigger taxes on trades.
• Some investors may direct new money into SCHD while keeping existing SPY shares in place.
• Some portfolios hold both, using SPY as a growth core and SCHD as simply an income component.

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.

Which Investor Goals Each Fund Fits

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.

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