The Best Dividend ETF to Buy With $1,000 Right Now -- Up 18% This Year

3 hours ago 2

David Dierking, The Motley Fool

Tue, June 30, 2026 astatine 10:50 AM CDT 4 min read

After a rocky agelong implicit the past mates years during the artificial quality (AI) roar period, the Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) is backmost to being an elite performer.

The money is up immoderate 16% twelvemonth to date, which puts it adjacent the apical of the U.S. dividend ETF category, and treble the show of the Vanguard S&P 500 ETF. It's been a beardown comeback for a money that has been a top-tier performer since its motorboat successful 2011.

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On apical of that, the Schwab U.S. Dividend Equity ETF has grown its yearly dividend each twelvemonth since its inception. Not lone person shareholders enjoyed a 13% mean yearly instrumentality since inception (in an situation wherever tech and maturation stocks person dominated nonetheless), they've besides been capable to number connected an income watercourse that's steadily improved and remained good supra the complaint of inflation.

But those returns were achieved during the archetypal fractional of 2026. What does the 2nd fractional and beyond person successful store for investors?

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The catalysts for SCHD outperformance successful 2026

The Schwab U.S. Dividend Equity ETF got retired of the gross beardown this twelvemonth erstwhile investors rotated retired of tech, priced retired complaint cuts, and began to see worth opportunities. This is the country of the marketplace wherever this money resides, looking for durable, financially beardown companies that wage dividends and tin withstand aggregate economical cycles.

The pivot backmost into tech that started to hap astatine the opening of Q2 has chopped into immoderate of that year-to-date outperformance, but the wide absorption connected prime has continued to payment the fund. The Fed's hawkish pivot astatine the June gathering is besides a nett affirmative for SCHD's portfolio since higher price-to-earnings (P/E) stocks thin to lag successful higher complaint environments.

The caller quarterly rebalance besides helped bring the portfolio backmost person to what it traditionally looks like. Tech vulnerability had climbed to 15% of the money acknowledgment to large rallies successful apical holdings Qualcomm and Texas Instruments. Post-rebalance, tech is backmost to a 10%-11% allocation. The Schwab U.S. Dividend Equity ETF was capable to seizure immoderate of the large advances successful tech stocks, but has sold precocious connected immoderate of its winners. It's the precise intent of rebalancing successful existent time!