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U.S. Equity ETF (SCHB) Hits New 52-Week High

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For investors seeking momentum, Schwab U.S. Broad Market ETF (SCHB - Free Report) is probably on radar now. The fund just hit a 52-week high, and is up more than 24% from its 52-week low price of $43.06/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

SCHB in Focus    

This ETF offers exposure to the broad U.S. stock market with a tilt toward large caps at 74%. It holds a large basket of 2,029 stocks with each holding less than 2.6% of assets. From a sector look, the fund is also well diversified with information technology, healthcare, financials, consumer discretionary and industrials making up for the top five sectors. The fund is the low cost choice in the equity ETF world, charging just 3 bps in annual fees (see: all the Total U.S. Market ETFs here).

Why the Move?

The U.S. stock market has been an area to watch lately given the Trump-induced rally and the flow of upbeat data. Trump’s expansive government spending, lesser financial regulation, and increased prospects of tax cuts would boost economic growth and increase inflation thereby setting the stage for a rate hike. The initial phase of rate hike is actually good for stocks, as it reflects an improving economy and a lower risk of deflation.

More Gains Ahead?

It seems that SCHA might remain strong given a high weighted alpha of 8.80% and a mediocre 20-day volatility of 9.73%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.

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