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Should Schwab U.S. Large-Cap Value ETF (SCHV) Be on Your Investing Radar?
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Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Schwab U.S. Large-Cap Value ETF (SCHV - Free Report) is a passively managed exchange traded fund launched on 12/11/2009.
The fund is sponsored by Charles Schwab. It has amassed assets over $10.93 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that fall in the large cap category tend to 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.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.04%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.30%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 21.40% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc Class B (BRK/B) accounts for about 3.44% of total assets, followed by Jpmorgan Chase (JPM - Free Report) and Exxon Mobil Corp (XOM - Free Report) .
The top 10 holdings account for about 18.75% of total assets under management.
Performance and Risk
SCHV seeks to match the performance of the Dow Jones U.S. Large-Cap Value Total Stock Market Index before fees and expenses. The Dow Jones U.S. Large-Cap Value Total Stock Market Index is a float-adjusted market capitalization weighted index containing the large-cap value portion of the Dow Jones U.S. Total Stock Market Index.
The ETF return is roughly 8.78% so far this year and is up about 14.38% in the last one year (as of 07/12/2024). In the past 52-week period, it has traded between $61.16 and $75.98.
The ETF has a beta of 0.93 and standard deviation of 14.85% for the trailing three-year period, making it a medium risk choice in the space. With about 506 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab U.S. Large-Cap Value ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SCHV is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $56.79 billion in assets, Vanguard Value ETF has $117.85 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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 Value ETF (SCHV) Be on Your Investing Radar?
Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Schwab U.S. Large-Cap Value ETF (SCHV - Free Report) is a passively managed exchange traded fund launched on 12/11/2009.
The fund is sponsored by Charles Schwab. It has amassed assets over $10.93 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that fall in the large cap category tend to 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.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.04%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.30%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 21.40% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Berkshire Hathaway Inc Class B (BRK/B) accounts for about 3.44% of total assets, followed by Jpmorgan Chase (JPM - Free Report) and Exxon Mobil Corp (XOM - Free Report) .
The top 10 holdings account for about 18.75% of total assets under management.
Performance and Risk
SCHV seeks to match the performance of the Dow Jones U.S. Large-Cap Value Total Stock Market Index before fees and expenses. The Dow Jones U.S. Large-Cap Value Total Stock Market Index is a float-adjusted market capitalization weighted index containing the large-cap value portion of the Dow Jones U.S. Total Stock Market Index.
The ETF return is roughly 8.78% so far this year and is up about 14.38% in the last one year (as of 07/12/2024). In the past 52-week period, it has traded between $61.16 and $75.98.
The ETF has a beta of 0.93 and standard deviation of 14.85% for the trailing three-year period, making it a medium risk choice in the space. With about 506 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab U.S. Large-Cap Value ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SCHV is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $56.79 billion in assets, Vanguard Value ETF has $117.85 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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.