Launched on 11/03/2009, the Schwab U.S. Large-Cap ETF (SCHX Quick QuoteSCHX - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.

The fund is sponsored by Charles Schwab. It has amassed assets over $52.58 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.

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 0.03%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.17%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, 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 30.60% of the portfolio. Financials and Consumer Discretionary round out the top three.

Looking at individual holdings, Nvidia Corp (NVDA Quick QuoteNVDA - Free Report) accounts for about 6.71% of total assets, followed by Apple Inc (AAPL Quick QuoteAAPL - Free Report) and Microsoft Corp (MSFT Quick QuoteMSFT - Free Report) .

The top 10 holdings account for about 31.54% of total assets under management.

Performance and Risk

SCHX seeks to match the performance of the Dow Jones U.S. Large-Cap Total Stock Market Index before fees and expenses. The Dow Jones U.S. Large-Cap Total Stock Market measures all U.S. equity securities with readily available prices. The index includes approximately the largest 750 stocks and is float-adjusted market-capitalization weighted.

The ETF has added about 27.57% so far this year and is up roughly 34.23% in the last one year (as of 11/29/2024). In the past 52-week period, it has traded between $17.88 and $23.85.

The ETF has a beta of 1.01 and standard deviation of 17.78% for the trailing three-year period, making it a medium risk choice in the space. With about 756 holdings, it effectively diversifies company-specific risk.

Alternatives

Schwab U.S. Large-Cap 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, SCHX is an outstanding option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares Core S&P 500 ETF (IVV Quick QuoteIVV - Free Report) and the SPDR S&P 500 ETF (SPY Quick QuoteSPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $570.45 billion in assets, SPDR S&P 500 ETF has $627.64 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.

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.