Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the Schwab U.S. LargeCap ETF (SCHX), a passively managed exchange traded fund launched on 11/03/2009.
The fund is sponsored by Charles Schwab. It has amassed assets over $32.38 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies usually 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.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
When considering an ETF’s total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.03%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.34%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund’s holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector–about 29.50% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc Common Stock Usd.00001 (AAPL) accounts for about 5.64% of total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT) and Amazon.com Inc Common Stock Usd.01 (AMZN).
The top 10 holdings account for about 26.18% of total assets under management.
Performance and Risk
SCHX seeks to match the performance of the Dow Jones U.S. Large-Cap Total Stock Market Index before fees and expenses. The Dow Jones U.S. Large-Cap Total Stock Market measures all U.S. equity securities with readily available prices. The index includes approximately the largest 750 stocks and is float-adjusted market-capitalization weighted.
The ETF has lost about -9.58% so far this year and was up about 9.81% in the last one year (as of 02/21/2022). In the past 52-week period, it has traded between $91.50 and $114.57.
The ETF has a beta of 1.01 and standard deviation of 22.62% for the trailing three-year period, making it a medium risk choice in the space. With about 769 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab U.S. LargeCap ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SCHX is an excellent option for investors seeking exposure to the Style Box – Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $316.94 billion in assets, SPDR S&P 500 ETF has $389.68 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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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