If you're interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than the Schwab U.S. Large-Cap ETF (
SCHX Quick Quote SCHX - Free Report) , a passively managed exchange traded fund launched on 11/03/2009.
The fund is sponsored by Charles Schwab. It has amassed assets over $33.48 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 fall in the large cap category tend to 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.
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.
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 0.03%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.47%.
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 28.30% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Apple Inc (
AAPL Quick Quote AAPL - Free Report) accounts for about 6.68% of total assets, followed by Microsoft Corp ( MSFT Quick Quote MSFT - Free Report) and Amazon Com Inc ( AMZN Quick Quote AMZN - Free Report) .
The top 10 holdings account for about 25.61% 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 return is roughly 16.88% so far this year and was up about 16.86% in the last one year (as of 07/12/2023). In the past 52-week period, it has traded between $42.25 and $52.50.
The ETF has a beta of 1.01 and standard deviation of 18.44% for the trailing three-year period, making it a medium risk choice in the space. With about 760 holdings, it effectively diversifies company-specific risk.
Schwab U.S. Large-Cap ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, SCHX is a good option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (
IVV Quick Quote IVV - Free Report) and the SPDR S&P 500 ETF ( SPY Quick Quote SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $336.69 billion in assets, SPDR S&P 500 ETF has $420 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.