Should Schwab U.S. Large-Cap Growth ETF (SCHG) Be on Your Investing Radar?

The Schwab U.S. Large-Cap Growth ETF (SCHG) was launched on December 11, 2009, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.

The fund is sponsored by Charles Schwab. It has amassed assets over $50.35 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 fall in the large cap category tend to have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.

Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Also, growth stocks are a type of equity that carries more risk compared to others. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.04%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 0.38%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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 43.4% of the portfolio. Telecom and Consumer Discretionary round out the top three.

Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 10.54% of total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).

The top 10 holdings account for about 58.67% 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 5.76% so far this year and it's up approximately 15.09% in the last one year (as of 03/02/2026). In the past 52-week period, it has traded between $22.27 and $33.69.

The ETF has a beta of 1.18 and standard deviation of 19.01% for the trailing three-year period, making it a medium risk choice in the space. With about 198 holdings, it effectively diversifies company-specific risk.

Alternatives

Schwab U.S. Large-Cap Growth ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SCHG is an outstanding option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Vanguard Growth Index Fund ETF Shares (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth Index Fund ETF Shares has $194.38 billion in assets, Invesco QQQ has $397.54 billion. VUG has an expense ratio of 0.03% and QQQ charges 0.18%.

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.

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Schwab U.S. Large-Cap Growth ETF (SCHG): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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