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Should Schwab U.S. LargeCap Growth ETF (SCHG) Be on Your Investing Radar?
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Looking for broad exposure to the Large Cap Growth segment of the US equity market? You should consider the Schwab U.S. LargeCap Growth ETF (SCHG - Free Report) , a passively managed exchange traded fund launched on 12/11/2009.
The fund is sponsored by Charles Schwab. It has amassed assets over $17.97 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
Large cap companies usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
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. Also, growth stocks are a type of equity that carries more risk compared to others. 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 0.39%.
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 46.40% of the portfolio. Consumer Discretionary and Telecom round out the top three.
Looking at individual holdings, Apple Inc Common Stock Usd.00001 (AAPL - Free Report) accounts for about 11.76% of total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT - Free Report) and Amazon.com Inc Common Stock Usd.01 (AMZN - Free Report) .
The top 10 holdings account for about 53.45% 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 gained about 31.25% so far this year and is up roughly 29.17% in the last one year (as of 12/29/2021). In the past 52-week period, it has traded between $122.81 and $166.80.
The ETF has a beta of 1.03 and standard deviation of 24.47% for the trailing three-year period, making it a medium risk choice in the space. With about 232 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab U.S. LargeCap 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 a great 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 $90.89 billion in assets, Invesco QQQ has $216.33 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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. LargeCap Growth ETF (SCHG) Be on Your Investing Radar?
Looking for broad exposure to the Large Cap Growth segment of the US equity market? You should consider the Schwab U.S. LargeCap Growth ETF (SCHG - Free Report) , a passively managed exchange traded fund launched on 12/11/2009.
The fund is sponsored by Charles Schwab. It has amassed assets over $17.97 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
Large cap companies usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
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. Also, growth stocks are a type of equity that carries more risk compared to others. 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 0.39%.
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 46.40% of the portfolio. Consumer Discretionary and Telecom round out the top three.
Looking at individual holdings, Apple Inc Common Stock Usd.00001 (AAPL - Free Report) accounts for about 11.76% of total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT - Free Report) and Amazon.com Inc Common Stock Usd.01 (AMZN - Free Report) .
The top 10 holdings account for about 53.45% 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 gained about 31.25% so far this year and is up roughly 29.17% in the last one year (as of 12/29/2021). In the past 52-week period, it has traded between $122.81 and $166.80.
The ETF has a beta of 1.03 and standard deviation of 24.47% for the trailing three-year period, making it a medium risk choice in the space. With about 232 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab U.S. LargeCap 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 a great 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 $90.89 billion in assets, Invesco QQQ has $216.33 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.