What Changed in SCHD’s March 2026 Review
SCHD’s 2026 reconstitution was one of the largest reshuffles in the fund’s history. Comparing the holdings in Schwab’s SEC filings from the end of February and the end of May 2026, the index added 25 companies and removed 23, replacing around a quarter of the fund in a single day.
The changes took effect after the market closed on Friday 20 March 2026, so the new portfolio was in place from Monday 23 March. Qualcomm, UnitedHealth Group and Procter & Gamble all joined, while Cisco Systems and AbbVie, two of the fund’s larger holdings, were removed.
FRC’s How to Invest in SCHD course is built from Schwab’s own SEC filings and S&P Dow Jones Indices’ index rules, and covers every SCHD reconstitution since 2012. The course page has a short video you can watch to decide whether the course is right for you.
This guide is part of FRC’s complete guide to SCHD, which starts with what SCHD is and how it works. FRC’s guide to SCHD’s holdings history covers every reconstitution since the fund launched in 2011.
What SCHD’s Reconstitution Is
SCHD tracks the Dow Jones U.S. Dividend 100 Index, run by S&P Dow Jones Indices. Once a year, the index screens every eligible U.S. company again and resets itself to the 100 that best meet its rules.
The figures used are taken in advance. Dividend records are measured as of the last business day of December, while market value, trading volume, share price and dividend yield are measured on the third Friday of February, which in 2026 was 20 February.
The new index then takes effect after the close on the third Friday of March. Because SCHD is an index fund, Schwab sells the companies that leave the index and buys the ones that join it, so the fund’s holdings change at the same time.
How the Index Chose Its 2026 Companies
The rules were the same as in every recent year. A company needed at least ten consecutive years of dividend payments, a float-adjusted market value of at least $500 million and average daily trading of at least $2 million over three months.
Eligible stocks were then ranked by indicated dividend yield, and the bottom half were removed from consideration. The rest received a composite score that weights four measures equally: cash flow to total debt, return on equity, dividend yield and five-year dividend growth.
The top 100 by that score were selected, with one exception. An existing member was kept if it ranked within the top 200, which gives current holdings some protection, and new companies were then added in rank order until the index reached 100.
What Every SCHD Investor Needs to Know
A reconstitution can change a quarter of what you own overnight, and most investors only find out afterwards. Anyone can tell you SCHD’s dividend yield, but do you understand how its index selects companies, why holdings are removed and what drives its dividend payments?
We’ve gone beyond internet opinions and recycled investment summaries. How to Invest in SCHD is a 21-chapter course built from Schwab’s SEC filings, historical holdings data and S&P Dow Jones Indices’ published methodology, covering SCHD’s holdings history, every reconstitution, its performance and dividends and the mistakes investors make, with study guides, practice questions and an assessment in each chapter. FRC’s three progressive ETF programmes take your knowledge further, from ETF Investing for Beginners, through ETF Investing Strategies, to Advanced ETF Investing.
FRC’s programmes and memberships are open to everyone, whether you are investing $500 or $500,000, and you can get started for less than the cost of a few shares. The question isn’t whether financial education costs money. It’s what a lack of it could cost you.
The Biggest Additions
Qualcomm was the largest company to join. By the end of May 2026, it made up around 6.7% of SCHD, making it the fund’s largest holding only two months after it arrived.
UnitedHealth Group was next, at around 5.1% at the end of May, followed by Procter & Gamble at around 3.6%, Abbott Laboratories at around 3.0% and Accenture at around 2.9%. Automatic Data Processing, Comcast and Blackstone each made up around 2.2% to 2.3%, and Devon Energy around 1.3%.
The remaining additions were much smaller companies, including Ares Management, Broadridge Financial Solutions, Principal Financial Group, Old Republic International, Booz Allen Hamilton, Erie Indemnity, Korn Ferry, Macy’s, Penske Automotive Group and several regional banks. Together, the 25 new companies made up around 32% of SCHD at the end of May 2026.
Familiar Names That Returned
Several of the 2026 additions had been in SCHD before. Procter & Gamble was one of the fund’s ten largest holdings in its first holdings list in February 2012 and was removed in 2020, while Qualcomm had been a member from 2015 until 2021.
Automatic Data Processing and Blackstone both returned only two years after being removed at the 2024 review. Abbott Laboratories, which was removed in 2013, came back after a gap of more than a decade.
Macy’s returned too. It was one of the companies removed during the 2020 pandemic, when it suspended its dividend, and qualified again once its payment record and other measures met the index’s rules.
The Biggest Removals
Cisco Systems was the largest company to leave, making up around 3.6% of SCHD at the end of February 2026. AbbVie, at around 3.5%, was close behind, and both had been among the fund’s larger holdings.
Valero Energy, at around 2.2%, and Halliburton, at around 1.1%, were the largest of several energy and materials companies removed. Coterra Energy, Amcor, Packaging Corporation of America, CF Industries, LyondellBasell, Ovintiv and Unum Group also left.
The rest were smaller companies, including Janus Henderson, Radian Group, International Bancshares, Signet Jewelers, Cathay General Bancorp, Whirlpool, Huntsman, FMC, Northwest Bancshares, First Commonwealth Financial, Carter’s and Kforce. Together, the removed companies made up around 16% of the fund at the end of February 2026.
Why Some Companies Were Removed
S&P Dow Jones Indices does not publish a reason for each removal, but the rules explain most of them. A company leaves if its yield falls into the lower half of the eligible group, or if its composite score drops outside the top 200.
Some removals had clear warning signs. FMC had cut its dividend sharply in October 2025, according to press reports, which would have hit both its yield and its dividend growth score, while Janus Henderson was the subject of a pending takeover at the time of the review.
For larger companies such as Cisco and AbbVie, the cause is less obvious and was not explained by the index provider. What the rules make clear is that no company, however large, keeps its place unless it continues to rank well on all four measures. FRC’s guide to why SCHD removed Microsoft shows how a rising share price alone can push a company out.
Why the Numbers Do Not Match Exactly
Most press reports said the 2026 review added 25 companies and removed 22. Comparing Schwab’s own holdings lists gives 25 additions and 23 removals, once a share-class change at Clearway Energy, which appears on both sides, is set aside.
The difference comes from timing. Holdings lists taken on different dates can include or exclude companies that left for other reasons, such as takeovers, around the time of the review, and the index does not replace companies removed between reviews until the following March.
The fund’s own count also moves. Schwab’s filing listed 102 holdings at the end of May 2026, and other sources have quoted different figures since, because each one counts on a different date.
Was It SCHD’s Biggest Reconstitution Ever?
Many videos and articles described 2026 as SCHD’s biggest reconstitution ever. By number of companies, that is not what Schwab’s filings show.
The 2020 review, which was postponed during the pandemic and completed over the summer, added 37 companies and removed 30, more than in 2026. Earlier in 2020, six more companies had already been removed between reviews, five of them after suspending their dividends.
What made 2026 stand out was the size of the companies involved. Qualcomm, UnitedHealth Group and Procter & Gamble all went straight into the top ten, and two of the fund’s larger holdings, Cisco and AbbVie, left at the same time.
How the Sector Mix Changed
The reconstitution shifted SCHD away from energy and towards health care and technology. Three separate press analyses agreed on the direction: energy fell by somewhere between three and eight percentage points, health care rose by two to four points and technology rose by around three points.
Materials were cut to roughly zero, as companies such as LyondellBasell, CF Industries, Huntsman and FMC left. Communication services rose with the addition of Comcast, to around 7% of the fund according to one analysis.
Some predictions before the review had suggested energy could fall to around 12%. The figures published afterwards put it nearer 16% to 17%, a reminder that forecasts made before the official announcement are estimates.
By the end of September 2026, Schwab’s figures showed consumer staples at around 20% of the fund, health care at around 19% and energy at around 15%. A year earlier, after the 2025 review, energy had been one of the fund’s largest sectors at around a fifth of the portfolio.
What Happened to the Existing Holdings
A reconstitution does not only affect the companies joining and leaving. When large new companies arrive, the weights of everything else are reduced to make room.
Lockheed Martin was SCHD’s largest holding at the end of February 2026, at around 4.8%, but had fallen to around 2.7% by the end of May. Altria fell from around 4.1% to around 2.9% and Bristol-Myers Squibb from around 4.3% to around 2.9%, even though all three stayed in the fund.
Texas Instruments moved the other way, rising from around 4.1% to around 5.9% and becoming the second-largest holding. The ten largest holdings made up around 43.6% of SCHD at the end of May, compared with around 42.5% at the end of February.
Three of the top ten at the end of May had just joined the fund: Qualcomm, UnitedHealth Group and Procter & Gamble, with Amgen also moving up into it. Lockheed Martin, Altria, Bristol-Myers Squibb and PepsiCo, all in the top ten in February, had dropped out of it.
How Often SCHD Rebalances
The reconstitution happens once a year, but SCHD’s index is also rebalanced every quarter, in March, June, September and December. The quarterly rebalances do not add or remove companies; they reset the weights so that no single company is above 4% and no sector is above 25%.
Between rebalances, weights drift as share prices move. That is how Qualcomm and UnitedHealth could make up more than 5% each by the end of May, and the index also applies a daily check that triggers an extra reweighting if the companies above 4.7% together exceed 22% of the index.
By early November 2026, after further quarterly rebalancing, Schwab’s published list showed Texas Instruments at around 4.8%, with Procter & Gamble at around 4.3% and Coca-Cola at around 4.2%. Any list of SCHD’s largest holdings is only accurate for the date it was taken.
FRC’s guide to SCHD’s longest-held stocks shows the four companies that have survived every review, including 2026, and how small their weights are by comparison.
What the Reconstitution Meant for Dividends
SCHD’s dividend depends on the dividends paid by the companies it holds, so a large reshuffle can change the fund’s payments. Press analysis of the 2026 review reported that the companies added had grown their dividends by around 63% over five years on average, against around 37% for those removed.
The fund’s 2026 payments so far have been steady rather than strong. SCHD paid $0.2569 a share in March, $0.2525 in June and $0.2665 in September, which together were around 0.8% higher than the same three payments in 2025.
The June payment was around 3% lower than a year earlier, which is a reminder that quarterly distributions can move in either direction. As prices rose, the yield also fell, with Schwab showing a 30-day SEC yield of 3.12% on 5 November 2026. FRC’s guide to SCHD’s dividend explains how much the fund pays and when.
How SCHD Performed After the Review
After the review, SCHD had a very strong run: by 6 November, its total return for the year was around 31%, compared with around 9% for SPY, an ETF that tracks the S&P 500, according to market data providers, and it closed at a record high of $36.21 on 4 November.
The fund grew with it. By 6 November 2026, SCHD’s net assets had reached around $119.9 billion, according to Schwab.
It is tempting to credit the reconstitution for that result, but nobody can separate its effect from everything else that moved markets in 2026. The fund also lagged the S&P 500 badly in 2023 and 2024, under the same rules.
What the record does show is that SCHD’s results can swing sharply from one year to the next as its holdings and the market change. FRC’s guide to SCHD’s price history covers its highs, falls and recoveries since 2011.
Do you know how SCHD performed during its worst market declines, how long recovery took and what happened to its dividends? How to Invest in SCHD examines the historical evidence and compares SCHD with other popular ETFs.
What SCHD Investors Need to Do
Nothing, in most cases. The reconstitution happens inside the fund, so investors do not need to buy or sell anything, and the changes do not create a tax bill for shareholders on their own.
SCHD’s portfolio turnover was around 41% in its most recent reported year, and the fund has paid no capital gains distributions in recent years. Every distribution from December 2016 to September 2026 was paid entirely from income.
What investors should do is check what they now own. A fund that was heavy in energy and financials a year ago now has more health care and technology, and that changes how it may behave in the next downturn.
If you’re putting your hard-earned money into SCHD without understanding how it works, you’re taking unnecessary financial risks. How to Invest in SCHD takes you inside the fund, its holdings, dividend strategy, performance and risks.
When the Next Reconstitution Happens
The next annual review is due in March 2027. Under the index rules, the figures will be measured on the third Friday of February, 19 February 2027, and the changes will take effect after the close on the third Friday of March, 19 March 2027.
Some financial websites publish predictions in the weeks beforehand, based on their own estimates of the index’s rules. These are useful for discussion, but the official changes are only confirmed once S&P Dow Jones Indices announces them.
The best way to see what changed is to compare Schwab’s published holdings lists from before and after the review, or to check the fund’s next SEC filing.
Common Mistakes About SCHD’s Reconstitution
Assuming SCHD is a fixed list of companies. The 2026 review replaced around a quarter of the fund in a single day.
Selling SCHD because a favourite company was removed. The fund is designed to replace companies that no longer meet its rules, and removals are part of how it works.
Buying shares of new additions just before the review. Index changes are widely anticipated, and any price effect is often reflected before the changes take effect.
Judging the reconstitution by a few months of returns. Short-term results reflect the whole market, not just the index’s changes.
Common Questions
When was SCHD’s 2026 reconstitution? The changes took effect after the close on Friday 20 March 2026, so the new portfolio was in place from Monday 23 March 2026.
How many stocks did SCHD add and remove in 2026? Schwab’s holdings lists show 25 additions and 23 removals. Most press reports quoted 25 additions and 22 removals, a difference that can come from how companies leaving for other reasons around the review are counted.
What were the biggest additions in 2026? Qualcomm, UnitedHealth Group, Procter & Gamble, Abbott Laboratories and Accenture were the largest new holdings by the end of May 2026.
What were the biggest removals in 2026? Cisco Systems and AbbVie were the largest, followed by Valero Energy and Halliburton.
Why did SCHD remove Cisco and AbbVie? S&P Dow Jones Indices does not publish reasons for individual removals. Each company must rank in the top half of eligible stocks by yield and score well enough on the four measures to stay, and both fell short at the 2026 review.
Did SCHD add Procter & Gamble back? Yes. Procter & Gamble was one of SCHD’s ten largest holdings in its first holdings list in February 2012, was removed in 2020 and returned in 2026.
How much of SCHD changed in 2026? Turnover at the review was around 31%, according to press reports. The 25 companies added made up around 32% of the fund by the end of May 2026.
Did the reconstitution change SCHD’s sectors? Yes. Energy fell, health care and technology rose and materials were cut to roughly zero.
Was 2026 SCHD’s biggest reconstitution ever? Not by number of companies. Schwab’s filings show the 2020 review added 37 companies and removed 30, more than in 2026, though 2026 involved more large companies moving into and out of the top ten.
How often is SCHD rebalanced? Its index is rebalanced every quarter, in March, June, September and December, to bring weights back within the 4% stock cap and 25% sector cap. Companies are only added or removed at the annual reconstitution in March, apart from removals between reviews for skipped or stopped dividends.
What are SCHD’s new holdings? The largest companies added in 2026 were Qualcomm, UnitedHealth Group, Procter & Gamble, Abbott Laboratories, Accenture, Automatic Data Processing, Comcast and Blackstone.
Do I need to do anything when SCHD reconstitutes? No. The changes happen inside the fund, and shareholders do not need to buy or sell anything.
Does the reconstitution create a tax bill? Not on its own. Every SCHD distribution from December 2016 to September 2026 was paid entirely from income, with no capital gains distributions.
When is SCHD’s next reconstitution? The next annual review is due to take effect after the close on Friday 19 March 2027.
Your Portfolio Deserves an Educated Investor
SCHD’s 2026 reconstitution replaced around a quarter of the fund, brought in Qualcomm, UnitedHealth Group and Procter & Gamble, and removed Cisco and AbbVie. It also moved the fund away from energy and towards health care and technology.
Before buying another few shares of SCHD, consider investing in understanding the fund itself. How to Invest in SCHD examines its selection methodology, holdings history, dividend taxation and investment strategies, while FRC’s three progressive ETF programmes take you from how ETFs work to managing risk across everything you own. FRC’s programmes and memberships are open to everyone, whether you are investing $500 or $500,000.
Your money is already working in the market. Now make sure your knowledge is working just as hard, and understand every change to SCHD before the next one arrives.
