Dividend stocks don’t always outperform the rest of the stock market. Over the past few years, investors have placed a premium on major tech names and growth stocks such as artificial intelligence (AI) stocks. High-yield dividend stocks are often left out of this part of the market.
Instead of rapid growth, dividend stocks offer low volatility and stable income. best dividend stocks These are often in slow-growing sectors such as energy, pharmaceuticals and financial services.
But so far in 2026, two popular exchange-traded funds (ETFs) focused on dividend stocks are outperforming the broad spectrum. S&P 500 Index. Schwab US Dividend Equity ETF (SCHD 0.98%) has given a total return of 19.7% so far, while iShares Core High Dividend ETF (HDV 1.07%) Got a return of 14.1%.
Both funds focus on US stocks that are expected to have above-average dividend yields. And so far in 2026, they are delivering great results. Let’s see which of these dividend stock ETFs is a better buy.
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1. iShares Core High Dividend ETF – 74 stocks, 2.9% dividend yield
iShares Core High Dividend ETF is low-cost index fund one who tracks a morningstar Index of high-yield dividend stocks. Its expense ratio is only 0.08%, and as of May 27, it owns 74 stocks that paid a trailing-12-month dividend yield of 2.9%.
The fund is heavy on non-tech stocks. Its top holdings by sector include:
- Consumer Staples (24.5% of the fund)
- Energy (20.8%)
- Health care (16.9%)
- Financial (10.7%)
- Utilities (9%)
Information technology stocks make up only 8.7% of this ETF’s assets. If you’re concerned that others prefer index funds S&P 500 ETF With AI and tech stocks becoming heavily weighted, this fund may be a better way to diversify into other parts of the market.
The iShares fund’s top five stock holdings (as of May 27) are:
- energy chief ExxonMobilat 8.1% of the fund, and beamat 6.1%
- healthcare stocks johnson and johnson at 5.7%, and AbbVie at 5.6%
- consumer goods group philip morrisat 4.6%
The only tech stock in this ETF’s top 10 holdings is Texas InstrumentsWhich represents just over 4% of the fund’s assets.
iShares Trust – iShares Core High Dividend ETF
today’s change
(-1.07%) $-0.29
current price
$26.91
key data points
day limit
$26.88 -$27.11
52wk range
$23.10 -$28.18
volume
1.4K
The iShares Core High Dividend ETF has given annual returns of 14% over the last three years and 11.4% over the last five years. During both of those longer time periods, the fund has underperformed the S&P 500.
2. Schwab US Dividend ETF – 103 stocks, 3.3% dividend yield
Schwab US Dividend ETF offers exposure to 103 stocks Dow Jones US Dividend 100 IndexWhich tracks high-yield dividend stocks. This fund has given a trailing dividend yield of 3.3%.
Compared to the iShares fund, the Schwab US Dividend ETF is a little heavier on tech stocks. Its top five sectors (as of March 31) are:
- Consumer Staples (19.4% of the fund)
- Health care (18.8%)
- Energy (16.9%)
- Industrialists (11.5%)
- Information Technology (11.1%)
The top two stock holdings of the Schwab US Dividend ETF are both AI-related: Qualcomm (about 6.3% of the fund) and Texas Instruments (about 6.1%). these two together semiconductor stocks Make up 12.4% of the fund’s assets. The rest of the top five stock holdings are UnitedHealth Group (5.1% of the fund), coca cola (4.1%), and merck (3.9%).
Schwab US Dividend Equity ETF
today’s change
(-0.98%) $-0.32
current price
$32.18
key data points
day limit
$32.15 -$32.34
52wk range
$26.07 -$32.91
volume
140.4K
This ETF has given annual returns (by net asset value) of 14% over the last three years and about 9.1% over the last five years. Like the iShares fund, it has underperformed the S&P 500 index over the long term.
Why buy HDV instead of SCHD?
I don’t own any of these ETFs, but if I had to choose one, I would buy the iShares Core High Dividend ETF. This is because my strategy in buying dividend funds would be to avoid AI stocks.
Buying HDV will give me the opportunity to tap into other parts of the market that may be less affected by a potential tech downturn. The iShares fund is more diversified than AI, while the Schwab fund has 12.4% of its assets. semiconductor stocks.
Both dividend ETFs have strengths and upside. Both charge low expense ratios. And both are ranked best dividend index funds. But the Schwab fund seems a bit overweight with AI stocks, which I believe defeats the purpose of buying a dividend fund. Based on this investment strategy, I would go with iShares Core High Dividend ETF.