The Schwab U.S. Dividend Equity ETF Has Surged 15% to Start 2026. Here's the Secret Fuel Source Driving the Rally.

By Matt DiLallo – Feb 21, 2026 at 12:07PM ESTKey PointsThe Schwab U.S. Dividend Equity ETF has a high weighting to the oil sector. Surging oil prices this year have helped fuel this ETF's robust returns in 2026.It holds several high-quality oil dividend stocks. These 10 Stocks Could Mint the Next Wave of Millionaires ›NYSEMKT: SCHDSchwab U.S. Dividend Equity ETFToday's Changeangle-down(0.13%) $0.04Current Price$31.61Price as of February 20, 2026 at 4:00 PM ETThis ETF is getting an oil-fueled boost.The Schwab U.S. Dividend Equity ETF (SCHD +0.13%) is one of the largest and most popular ETFs focused on dividend stocks. The fund offers a high current income yield (3.5% over the last 12 months). It has also delivered robust returns over the years. While the fund delivered an underwhelming performance last year -- it only generated a 0.4% return -- it has gone hyperbolic in early 2026, surging nearly 15%. That has vastly outperformed the S&P 500's less than 1% rise this year. Here's the secret fuel source driving its outperformance. Image source: Getty Images. A hidden fuel source The Schwab U.S. Dividend Equity ETF tracks an index (Dow Jones U.S. Dividend 100 Index) designed to measure the performance of 100 top dividend stocks. It screens companies based on several factors, including dividend yield and five-year dividend growth rate. The fund's 100 holdings provide fairly broad exposure to the stock market. However, it has a high sector weighting to energy stocks (19.9% at the end of last year, its largest sector allocation). The fund's high exposure to energy stocks weighed on its returns last year, as falling oil prices hurt its performance. ExpandNYSEMKT: SCHDSchwab U.S. Dividend Equity ETFToday's Change(0.13%) $0.04Current Price$31.61Key Data PointsDay's Range$31.36 - $31.6652wk Range$23.87 - $31.88Volume20M However, this year has been a different story. Crude prices have rallied sharply in 2026. Brent oil, the global benchmark price, has surged 15% to more than $70 a barrel. Oil has risen due to the potential for supply disruptions in Venezuela and Iran. The U.S. military captured Venezuela's former president and charged him with narcoterrorism. Meanwhile, there's growing concern about an escalating conflict between the U.S. and Iran. Loaded with top oil dividend stocks The rise in crude prices has been a boon for this ETF as two of its top holdings are oil companies. Chevron (CVX 0.57%) is its fourth-largest holding, accounting for 4.21% of its assets, while ConocoPhillips (COP 0.95%) ranks sixth at 4.19%. It also has meaningful weightings to SLB (2.7% of the fund), EOG Resources (2.36%), and Valero Energy (2.19%). All five of these energy stocks have surged this year: CVX data by YCharts However, this oil-fueled upside catalyst isn't why the Schwab U.S. Dividend Equity ETF holds these energy stocks. They're in the fund because they're excellent dividend stocks. For example, Chevron recently increased its dividend by 4%, extending its growth streak to 39 consecutive years (the second-longest dividend growth streak in the oil patch). The oil giant has grown its payout at a 6% compound annual rate over the last five years (faster than the S&P 500's 5% growth rate). Chevron also offers a much higher dividend yield than the S&P 500 (currently 3.9% versus 1.2% for the broader market index). This combination of a high yield and an above-average dividend growth rate is right in this ETF's sweet spot. ExpandNYSE: CVXChevronToday's Change(-0.57%) $-1.06Current Price$183.72Key Data PointsMarket Cap$370BDay's Range$182.32 - $184.8952wk Range$132.04 - $187.90Volume373KAvg Vol11MGross Margin13.79%Dividend Yield3.76% ConocoPhillips also pays a high-yielding dividend that is growing at an above-average rate. The oil giant currently yields 2.9% and increased its dividend by 8% late last year. The oil company's stated goal is to deliver dividend growth within the top 25% of S&P 500 companies. Both oil companies should have plenty of fuel to continue increasing their high-yielding dividends. Chevron expects to grow its already robust free cash flow by more than 10% annualized through 2030. That assumes oil averages around $70 a barrel. Meanwhile, ConocoPhillips expects to add $7 billion to its annual free cash flow by 2029 (assuming $70 crude oil), nearly double last year's level. That should give them plenty of fuel to continue increasing their high-yielding payouts. Oil-fueled dividends The oil patch is home to a plethora of top dividend stocks. That's why the Schwab U.S. Dividend Equity ETF currently has a high sector weighting. The fund's oil stock investments have been a boon this year, as a rally in the oil market has helped fuel big gains for investors in this dividend ETF. With more dividend growth ahead from its oil holdings, the fund could continue to produce high-octane returns for investors over the long haul. Read NextSep 22, 2025 •By Matt DiLalloThis Top Dividend ETF Is Relying on These Stocks to Fuel Its High-Yielding PayoutJun 7, 2025 •By Reuben Gregg BrewerThe Schwab U.S. Dividend Equity ETF Loaded Up on Energy Stocks. Here Are the Top 3.Mar 30, 2025 •By Matt DiLalloThis Top Dividend ETF Loves These Leading Oil Stocks.

Should You Buy Them, Too?Jun 18, 2024 •By Matt DiLalloAre There Any Dividend Buys as the S&P 500 Rallies? Yes, and Here They Are.Jan 7, 2017 •By Tyler Crowe5 Top Index Funds to Buy in January for a Profitable 2017About the AuthorMatt DiLallo has been a contributing Motley Fool stock market analyst specializing in covering dividend-paying companies, particularly in the energy and REIT sectors, since 2012. He also covers pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.TMFmd19X@MatthewDiLalloStocks MentionedSchwab U.S. Dividend Equity ETFNYSEMKT: SCHD$31.61 (+0.13%) $+0.04ChevronNYSE: CVX$183.72 (0.57%) $1.06ConocoPhillipsNYSE: COP$110.53 (0.95%) $1.06SlbNYSE: SLB$50.85 (1.34%) $0.69EOG ResourcesNYSE: EOG$123.03 (0.68%) $0.84Valero EnergyNYSE: VLO$200.76 (+0.76%) $+1.52*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.