Schwab exchange-traded funds (ETFs) are among the most prominent investing vehicles long-term passive investors can use to gain exposure to the market.
SCHB offers low-cost broad-market exposure and has a strong historical performance with a 12.78% annual return over the last decade, closely tracking its index. Current risks include high tech stock concentration, elevated valuation metrics, and potential market corrections due to ongoing Fed policy changes. Consider defensive alternatives like large-cap value or equal-weighted ETFs to mitigate volatility in the current market environment.
2024 is likely to be a year of overperformance led by technology mega-caps. SCHB offers wide exposure to the stock market with low expense ratio, yet high concentration in mega-cap technology stocks. Concentration in mega-caps poses risks for broad-market ETF investors, alternative diversification options should be considered.