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Should Schwab U.S. Large-Cap Growth ETF (SCHG) Be on Your Investing Radar?
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The Schwab U.S. Large-Cap Growth ETF (SCHG - Free Report) was launched on 12/11/2009, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by Charles Schwab. It has amassed assets over $26.79 billion, making it one of the largest ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.04%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.43%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 46.10% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 13.05% of total assets, followed by Apple Inc (AAPL - Free Report) and Amazon Com Inc (AMZN - Free Report) .
The top 10 holdings account for about 55.24% of total assets under management.
Performance and Risk
SCHG seeks to match the performance of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index before fees and expenses. The Dow Jones U.S. Large-Cap Growth Total Stock Market Index is float-adjusted market-capitalization weighted and includes the large-cap growth portion of the Dow Jones U.S. Total Stock Market Index.
The ETF has added about 11.88% so far this year and is up about 48.75% in the last one year (as of 03/29/2024). In the past 52-week period, it has traded between $63.60 and $93.32.
The ETF has a beta of 1.10 and standard deviation of 22.99% for the trailing three-year period, making it a medium risk choice in the space. With about 253 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab U.S. Large-Cap Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SCHG is an excellent option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $117.65 billion in assets, Invesco QQQ has $256.08 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should Schwab U.S. Large-Cap Growth ETF (SCHG) Be on Your Investing Radar?
The Schwab U.S. Large-Cap Growth ETF (SCHG - Free Report) was launched on 12/11/2009, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by Charles Schwab. It has amassed assets over $26.79 billion, making it one of the largest ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.04%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.43%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 46.10% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 13.05% of total assets, followed by Apple Inc (AAPL - Free Report) and Amazon Com Inc (AMZN - Free Report) .
The top 10 holdings account for about 55.24% of total assets under management.
Performance and Risk
SCHG seeks to match the performance of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index before fees and expenses. The Dow Jones U.S. Large-Cap Growth Total Stock Market Index is float-adjusted market-capitalization weighted and includes the large-cap growth portion of the Dow Jones U.S. Total Stock Market Index.
The ETF has added about 11.88% so far this year and is up about 48.75% in the last one year (as of 03/29/2024). In the past 52-week period, it has traded between $63.60 and $93.32.
The ETF has a beta of 1.10 and standard deviation of 22.99% for the trailing three-year period, making it a medium risk choice in the space. With about 253 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab U.S. Large-Cap Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SCHG is an excellent option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $117.65 billion in assets, Invesco QQQ has $256.08 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.