Large-cap tech has led the market higher over the past couple of weeks, and this week we’ll get earnings results from some of the biggest names in that category. Today after the bell, we’ll hear from Facebook (FB), and later this week, giants Apple (AAPL), Microsoft (MSFT), and Amazon (AMZN) are slated to report. We’ll also hear from Dow companies Boeing (BA), Caterpillar (CAT), and McDonald’s (MCD).
Investors are piling into the highly coveted ‘FAANG’ stocks for their appealing growth. Still, factors like regulatory concerns, geopolitical and supply chain issues, and possible shifts in tax laws threaten to take the wind out of the sails for any individual stock without much warning.
Along with the potential for supercharged returns from large-cap growth comes the potential for volatility. Investing in a fund fixed on growth can help diversify your portfolio while reducing your risk.
In today’s trade, we’ll look at one of the top-rated large-cap growth ETFs for our readers who want to reap the benefits of stocks with high growth potential while cutting back on exposure to the risk involved with individual stocks.
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The Schwab US Large-Cap Growth ETF (SCHG) is another low-cost option for those looking to diversify into growth through a basket of large-cap equities. The fund tracks the Dow Jones U.S. Large-Cap Growth Total Stock Market index.
Unlike QQQ, SCHG offers exposure to companies from many growth-oriented sectors. There is, of course, a sector bias toward tech, which makes up about 39% of the portfolio spread among consumer discretionary, communication services, health care, and other sectors. Of the remaining 61% industrials, health care, energy, and consumer goods receive equal weighting.
The fund selects its growth stocks from 750 of the largest companies (by market cap) based on fundamental factors, including projected earnings growth as well as trailing revenue and earnings growth. Since it draws from a larger selection universe, SCHG has a significant mid-cap tilt. The index rebalances quarterly and undergoes an annual reconstitution in September.
Any actively managed product is ultimately a wager on the portfolio managers who pick the stocks. With a long history of outperforming peers, Cathie Wood, ARK Invest’s founder and chief investment officer, is the curator of ARK’s investment philosophy and the ultimate authority in the firm’s investment decisions.
The Schwab US Large-Cap Growth ETF (SCHG)
- Weighted Average Market Cap $996.19B
- Price / Earnings Ratio 44.34
- Price / Book Ratio 10.86
- YTD Daily Total Return 18.76%
- Yield 0.43%
- Expense Ratio 0.4%
- Net Assets 15.16B
- Number of Holdings 223
- Top Holdings Microsoft (MSFT), Apple (AAPL), Amazon.com (AMZN)
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