SCHD Soars Ahead of VNQ in Higher-For-Longer Regime

The Schwab U.S. Dividend Equity ETF (SCHD) and Vanguard Real Estate ETF (VNQ) are two popular options for retirees seeking quarterly income.

Both funds distribute dividends quarterly, but their performance has diverged significantly since the federal funds upper bound rose to 3.75% in December 2025 and the 10-year Treasury hit 4.74%.

SCHD tracks the Dow Jones U.S. Dividend 100 Index, focusing on cash flow strength, return on equity, and payout consistency. Its portfolio is anchored by companies like Abbott Laboratories (4.7%), Merck (4.4%), and Coca-Cola (4.3%).

VNQ, on the other hand, is a concentrated sector bet on U.S. real estate investment trusts, including Welltower (8.5%), Prologis (7.0%), and Equinix (5.2%). However, this bet faces pressure as the 10-year Treasury nears a 99.2nd percentile reading for the trailing year.

Since August 2021, SCHD has returned 63.0% on an adjusted basis, while VNQ has returned 13.4%. Year to date, SCHD's gains are 30.5%, and VNQ's are 14.2%.