Should Schwab US Large-Cap Growth ETF (SCHG) Be On Your Pain Investing Radar?

Schwab US Large-Cap Growth ETF (SCHG) was launched on 12/11/2009, and is an exchange-traded fund designed to provide broad exposure to the Large Cap Growth sector of the US equity market.

This fund is sponsored by Charles Schwab. It has amassed more than $3.4 billion in assets, making it one of the largest ETFs trying to target the High Growth segment of the US market.

Why Big Cap Growth

Large cap companies typically have a market capitalization of more than $10 billion. Overall, they tend to be a more stable option, with less risk and more real-time liquidity than mid and small cap companies.

While growth stocks boast higher than average sales and earnings growth rates, and are expected to grow faster than the broader market, investors should take note of these types of stocks with higher valuations. Another thing to keep in mind is the high level of volatility that is associated with growth stocks. Compared to the value of stocks, growth stocks are a safe bet in a strong bull market, but don’t perform as strongly in some other financial environments.

Funeral

Price is an important factor in choosing the right ETF, and the cheapest funds can outperform their more expensive counterparts when all other factors are equal.

The annual expense ratio for this ETF is 0.04%, making it one of the least expensive products in the area.

The paid 12-month new paid 0.43 %.

Sector Exposure and Top Holdings

Although ETFs provide diversified exposure, which mitigates the same risk, a thorough analysis of the fund’s portfolio is an important task. And, most ETFs are transparent assets that disclose their holdings on a daily basis.

This ETF is heavily weighted towards the Information Technology sector–about 47.70% of the portfolio. Telecom and Consumer Discretionary round out the top three.

Looking at individual holdings, Apple Inc (AAPL) accounts for 12.15% of total assets, followed by Microsoft Corp (MSFT) and Nvidia Corp (NVDA).

The top 10 holdings account for 58.14% of all assets under management.

Performance and Risk

SCHG seeks to benchmark the performance of the Dow Jones US Large-Cap Growth Total Stock Market Index before fees and expenses. The Dow Jones US Large-Cap Growth Total Stock Market Index is a round-adjusted market-capitalization weighting and includes the large-cap growth component of the Dow Jones US Total Stock Market Index.

The ETF is up 24.46% so far this year and is up 38.95% in the last one year (as of 10/08/2024). Over the past 52 weeks, it has traded between $75 and $155.

The ETF has a beta of 1.11 and a standard deviation of 23.45% for the next three years, making it a moderate risk option in the space. With about 251 holdings, it clearly differentiates the risk of the company.

Other ways

Schwab US Large-Cap Growth ETF has a Zacks ETF Rank of 2 (Buy), which is based on the asset class’s expected return, price range, and momentum, among other factors. Because of this, SCHG is an excellent choice for investors seeking exposure to the Style Box – Large Cap Growth segment of the market. There are some additional ETFs in the space that investors may also consider.

The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track the same index. While the Vanguard Growth ETF has $138.41 billion in assets, the Invesco QQQ has $288.40 billion. VUG has a fee rate of 0.04% and QQQ charges 0.20%.

Bottom-Line

An increasingly popular choice among retail and institutional investors, fixed-income ETFs offer low cost, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long-term investors.

To learn more about this product and other ETFs, screen products that suit your investment goals and read articles on the latest developments in the ETF investing universe, please visit the Zacks ETF Center.

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