The Schwab U.S. Large-Cap Growth ETF offers a tech-oriented ETF solution with a low expense ratio and strong potential for long-term, risk-adjusted returns. I previously rated this ETF a buy due to its attractive technology exposure and upside potential, especially with AI driving growth in 2025. Foxconn's Q4 revenue update suggests that the AI boom is continuing which is set to benefit the Schwab U.S. Large-Cap Growth ETF.
SCHG: A Top Pick For Large-Cap Growth Investors With One Key Concern
I have a hold rating on SCHG due to stretched valuations and technical signals suggesting potential consolidation or correction. The Mag 7's EPS growth is expected to outperform the S&P 493, benefiting large-cap growth stocks like those in SCHG. SCHG's valuation metrics, including a high P/E ratio and PEG ratio, indicate potential overvaluation despite its high-quality holdings.
The SCHG ETF has a strong contribution from technology companies, and together with the S&P 500, it brought a strong return to the investor. Despite this, projections indicate that the risk premium is decreasing, while prices and margins are beginning to be questioned. Valuation against European peers, which until 2021 was very similar, was abruptly increased.
SCHG offers strong long-term returns, closely tracking its benchmark, with a 139% cumulative return over five years, nearly identical to QQQ. The fund is tech-heavy, with top holdings in Apple, Nvidia, and Microsoft, making up nearly 34% of assets. Schwab U.S. Large-Cap Growth ETF has lower management fees (0.04%) compared to QQQ but also a lower yield (0.38%), making overall returns similar.
Investing in a growth ETF can be a smart way to build your portfolio with minimal effort. A growth ETF is a collection of stocks that have the potential to earn higher-than-average returns, grouped together into a single investment.
Investing in the stock market can help you build long-term wealth, but the investments you choose can make or break your earning potential.
Launched on 12/11/2009, the Schwab U.S. Large-Cap Growth ETF (SCHG) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Growth segment of the US equity market.
The Schwab U.S. Large-Cap Growth ETF aims to closely track the Dow Jones U.S. Large-Cap Growth Total Stock Market Index, before fees and expenses. Historically, I have maintained a bullish stance on SCHG, and my previous "buy" rating from three years ago has proven accurate. The article evaluates SCHG's current market price and its viability as an investment option in today's market environment.
Growth funds, particularly SCHG, are core holdings for tax-sensitive investors due to long-term performance, tax efficiency, and quality. SCHG is a low-cost, tax-efficient fund focusing on U.S. growth equities, suitable for a diversified portfolio's core, with five star ratings from Morningstar. SCHG's portfolio is tech-heavy, with top holdings like AAPL, MSFT, and NVDA, offering high growth potential but also carrying valuation and macroeconomic risks.
Investing in growth exchange-traded funds (ETFs) can be a fantastic way to build wealth, and it takes less of your time and effort than buying individual stocks.
This ETF Has Nearly Doubled the S&P 500 Since 2009. Here's How It Could Turn $200 per Month Into $1.3 Million.