NEW YORK, March 30, 2026, 4:56 PM EDT
- Schwab’s yearly rebalance shifted health care up to 18.5% of SCHD. Abbott Laboratories and UnitedHealth Group each now make up roughly 3.8% of the fund.
- Investors poured $24.1 billion into U.S. dividend funds during the first quarter, with SCHD alone hauling in close to $4 billion of that, according to Reuters.
- Analysts say the trade could fizzle if oil prices slip and growth stocks retake the lead.
Schwab U.S. Dividend Equity ETF (SCHD), with $83.9 billion in assets, pushed further into health care during its annual portfolio shake-up. Abbott Laboratories and UnitedHealth Group are now among its largest holdings, as cash continues to pour into dividend-focused funds.
SCHD is suddenly in the thick of an ongoing rotation into dividend names. According to LSEG Lipper, U.S. dividend funds pulled in $24.1 billion during the first quarter—the strongest start to any year in four. Investors are chasing more reliable income streams, spooked by volatile rates, sliding bonds, and geopolitical jitters.
SCHD finished Monday at $30.48, ticking up 0.13%, according to Schwab’s market page. Its holdings page showed consumer staples leading at 19.3% of assets, with health care at 18.5% and energy following at 17.2%. Chevron and ConocoPhillips remained the top two holdings.
Abbott and UnitedHealth have edged up to around 3.8% each, right behind the leaders; they’re joined by Merck, Coca-Cola, Texas Instruments, Amgen and PepsiCo to round out SCHD’s top 10. Schwab’s latest figures show a 30-day SEC yield of 3.41% as of March 26. The fund keeps its expense ratio low at 0.06% for tracking the Dow Jones U.S. Dividend 100 Index.
According to a Motley Fool analysis out Monday, 22 positions were cut and 25 new ones went in during the yearly reshuffle. Health care’s share climbed, jumping from 15.4% to 18.9%. Yield? Still holding close to 3.4%. The five-year average for dividend growth nudged higher as well, now at 9.4% versus the previous 8.6%.
The Motley Fool highlighted SCHD’s 11% climb through March 27, contrasting it with a roughly 1% dip in Vanguard’s S&P 500 ETF, VOO. The article pointed to energy, consumer staples, and other defensive sectors as drivers behind SCHD’s relative strength—despite March shaking up market leadership.
“Investors are gravitating toward dividend strategies,” said Jun Li, who leads global and Americas wealth and asset management at EY. Shanon Davis, chief executive at American Alternative Assets, called dividends “a partial substitute” for bonds. Reuters
It’s not just this fund. The Capital Group Dividend Value ETF pulled in upwards of $3 billion this year, according to LSEG Lipper figures cited by Reuters, pointing to a wider appetite beyond a single issuer or quarterly reshuffle.
Even so, it’s hardly a straightforward bet. Dividend funds have picked up a tailwind from their bigger stakes in oil and gas—energy names surged as crude rallied during the Iran conflict. But Stone Fox Capital, posting on Seeking Alpha, warned that SCHD might once again fall behind the S&P 500 after its latest rebalance, should oil prices ease off and investors rotate back into growth stocks.
So far, the approach has delivered. Energy holds at 17.2% of the fund, with staples and health care together making up almost 40%. Where SCHD heads next could hinge more on oil prices, interest rates, and appetite for defensive dividend plays than on the rebalance itself.
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