Back in 2025, I was telling everyone to stop buying SCHD. 📉
I made videos, shared insights, and suggested alternatives—and guess what? That advice held up.
DJRO returned over 15%
VIG delivered 14%+
VM crushed it with 15%+ total returns
Meanwhile… SCHD? Just 4.3% for the whole year. 😬 Not even close.
But fast forward to January 2026, and things are flipping fast. SCHD is already up nearly 6%, while the S&P 500 sits at only 1.5%. What changed? Let’s break it down.
Meet Harry 👋
Early 2024, Harry was all-in on SCHD. He loved:
✅ Dividend yield
✅ High-quality companies (Coca-Cola, Chevron, AbbVie)
✅ Stability
Then 2024 happened… SCHD returned 11% while the S&P 500 soared. Painful. 😖
Harry didn’t sell—but he paused contributions and switched to DGRO and VIG, which were crushing it. Smart move.
2025 results:
DGRO: 15.7%
VIG: 14%
VM: 15%
Three to four times better than SCHD. His portfolio survived, and then… something shifted.
The Energy Factor ⚡
SCHD has always leaned heavily on energy stocks. By March 2025, energy made up 19% of SCHD’s portfolio.
For years, that was a drag. Oil prices were volatile, tech was king, and energy lagged.
But Harry noticed something few dividend investors were watching: AI is changing everything—and it runs on electricity.
2024: Global data centers used 415 TWh (~1.5% of all electricity)
2030 projection: 945 TWh (~3% of global electricity)
US alone? From 183 TWh in 2024 → 426 TWh by 2030. That’s 133% growth. And demand keeps accelerating. Some AI data centers will need as much electricity as small cities! 🏙️
Where will all that power come from? Not mostly solar or wind—it’s natural gas and coal, with natural gas alone needing +130 TWh by 2030.
Why SCHD Could Soar in 2026 🚀
SCHD holds major energy players like Chevron, Exxon, and Phillips 66. These companies are pivoting toward the AI electricity boom:
Chevron + GE Vernova: gas-fired plants for data centers
Exxon + NextEra Energy: 1.2 GW power plant targeting AI demand
The very sector that dragged SCHD down for years could now be the fund’s biggest advantage.
Early 2026 numbers confirm it: SCHD up 6%, S&P 500 1.5%. Could the long-awaited rotation into value and dividend stocks finally be here?
The Risks ⚠️
Of course, no investment is risk-free:
Oil prices could drop (some forecasts: Brent crude mid-$50s)
SCHD has zero exposure to tech giants like Nvidia or Microsoft
Algorithmic efficiency could reduce AI electricity demand
March 2026 SCHD reconstitution could change sector allocations
But the tailwinds are strong:
3.8% dividend yield (3x S&P 500)
13+ years of dividend growth
Ultra-low expense ratio: 0.06%
Price-to-earnings ratio: ~13.5x vs inflated market valuations
If you’re focusing on dividend growth, income, and long-term wealth-building, this could be the setup investors have been waiting for.
Final Thoughts 💡
Harry isn’t abandoning DGRO or VIG—he’s just adding SCHD back into his portfolio because the macro conditions changed.
✅ Heavy energy allocation
✅ Dividend growth in a high-rate environment
✅ Value-oriented holdings when growth stocks are expensive
The evidence suggests SCHD deserves a serious look for 2026.
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#InvestSmart #DividendInvesting #SCHD #AIRevolution #WealthBuilding #FinanceTrends2026
