If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Schwab U.S. Large-Cap Growth ETF (SCHG), a passively managed exchange traded fund launched on 12/11/2009.
The fund is sponsored by Charles Schwab. It has amassed assets over $34.70 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
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.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
Costs
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 0.04%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.46%.
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 45% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 11.21% of total assets, followed by Microsoft Corp (MSFT) and Nvidia Corp (NVDA).
The top 10 holdings account for about 54.6% 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 lost about -11.92% so far this year and it's up approximately 7.13% in the last one year (as of 04/15/2025). In the past 52-week period, it has traded between $21.76 and $29.10.
The ETF has a beta of 1.16 and standard deviation of 23.85% for the trailing three-year period, making it a medium risk choice in the space. With about 229 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab U.S. Large-Cap Growth 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, SCHG is a good option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $142.27 billion in assets, Invesco QQQ has $289.68 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
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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Schwab U.S. Large-Cap Growth ETF (SCHG): ETF Research Reports Apple Inc. (AAPL): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Invesco QQQ (QQQ): ETF Research Reports Vanguard Growth ETF (VUG): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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