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Should Schwab U.S. LargeCap Growth ETF (SCHG) Be on Your Investing Radar?

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Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Schwab U.S. LargeCap Growth ETF (SCHG - 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 $16.88 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.

Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Additionally, growth stocks have a greater level of risk associated with them. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.


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 0.38%.

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 45.70% of the portfolio. Telecom and Consumer Discretionary round out the top three.

Looking at individual holdings, Apple Inc Common Stock Usd.00001 (AAPL - Free Report) accounts for about 12.05% of total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT - Free Report) and Inc Common Stock Usd.01 (AMZN - Free Report) .

The top 10 holdings account for about 52.84% 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 roughly 24.99% so far this year and is up about 34% in the last one year (as of 10/22/2021). In the past 52-week period, it has traded between $111.90 and $157.96.

The ETF has a beta of 1.03 and standard deviation of 25.08% for the trailing three-year period, making it a medium risk choice in the space. With about 231 holdings, it effectively diversifies company-specific risk.


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 an outstanding 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 $86.62 billion in assets, Invesco QQQ has $193.77 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.


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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