The Schwab U.S. Dividend Equity ETF (NYSEMKT:SCHD) ended Friday, Oct. 30, at $35.78. That was the fund's 28th record close in 2026, and it traded near $36 as of this writing.

On price alone, the fund is up about 31% this year, while the S&P 500 has climbed about 11%. With dividends, the fund has returned about 34%, leaving it on track for its best calendar year since it started in 2011. Its strongest full year yet was 2013, at around 33%.

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But for a fund of dividend-paying value stocks that most people buy for income, a higher price means a lower yield for anybody buying now. After all, the payout doesn't grow just because the share price does. And since mid-October alone, the price has climbed around 5%.

I still think the fund is worth buying. I'd just expect less than this year has brought.

Image source: The Motley Fool.

A smaller yield

The fund doesn't set its own dividend. It passes on what its 102 holdings pay quarterly, minus an expense ratio of 0.06%. Its last four payments, including the one made on Sept. 28, come to around $1.05 a share, according to Schwab.

At today's price, that's a yield of around 2.9%. It was around 3.1% in mid-October and about 3.8% at the end of 2025.

In dollars, $1,000 invested now buys around $29 a year of income at the current payout rate. The same $1,000 at the end of last year bought about $38.

But the fund has had a yield this low before.

How did 2021's buyers do?

The closest recent match is the end of 2021. The fund gained around 30% that year including dividends, finished the year just under its record close, and yielded about 2.8% at year-end -- a little less than today.

The next nine months were tough. By Sept. 30, 2022, the fund's price had fallen around 18% from where 2021 ended. And after a brief climb in early January 2022, it didn't close above that year-end mark again until July 2024. Counting dividends, the fund still lost around 3% in 2022.

The payout, though, kept growing. The fund's 2022 payments rose about 14% over 2021's. Still, a buyer who reinvested every dividend didn't get back to even for good until January 2024.

In all, that buyer is up around 58% with dividends reinvested, or about 10% a year. And with the yearly payout up about 41% since 2021, the income on that original purchase now works out to a yield of about 3.9%.

The payout has slowed

Of course, the 2021 buyer got help from fast payout growth. The fund's yearly payout climbed around 11% in 2021, then another 14% in 2022.

Now, the payout's growth is cooling. Yearly growth slowed from around 12% in 2024 to about 5% in 2025. And the last four payments are only about 2% higher than the four before them.

Put another way, a buyer today is counting on the payout picking up again, and it might not do so quickly.

The holdings' valuation doesn't look rich, at least. Schwab showed the fund's price-to-earnings ratio at around 18 at the end of September. For the Schwab U.S. Large-Cap ETF, which tracks the broader large-cap market, the number was around 25.

That same day, the dividend fund's trailing distribution yield was about 3.2%, versus around 1% for the large-cap fund. The dividend fund has gained about 10% since then while the S&P 500 has been nearly flat, so both gaps have probably shrunk.

Yes, a fund up around 31% over 10 months might lose a big chunk of that, like it did in 2022. But the 2021 buyer kept collecting a rising payout through that drop, and a buyer now should still collect one, even if it grows slower.

Is the fund still worth buying at a record? I think so. A yield just under 3% is less income than buyers got in January, but it's near what 2021's buyers paid, and the holdings seem to trade at a lower price-to-earnings ratio than the broad market. I'd buy shares at this price, maybe adding a bit at a time. I just wouldn't count on another year like 2026.

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Schwab's Dividend ETF Keeps Hitting Records. I'd Still Buy It Now. was originally published by The Motley Fool