Stocks were on track to close the holiday-shortened week higher after minutes from the most recent FOMC meeting fueled hopes on Wall Street that the Fed may soon begin to ramp down its monetary policy tightening.
Whether you think that the bottom is in or not, there’s no denying that, over the long run, the market has a history of rebounding and moving higher. That’s especially true for stocks that have significant growth potential. However, 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 risk. Choosing the right basket of growth stocks can help maximize your earnings while tapping into many companies from industries with high growth potential, like information technology and financial services. Today we’ll highlight a top-rated large-cap growth investment 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.
The Schwab US Large-Cap Growth ETF (SCHG) is a low-cost option for diversifying 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 the technology-focused Invesco QQQ Trust (QQQ), SCHG offers exposure to companies from many growth-oriented sectors. There is, of course, a sector bias toward tech, which makes up about 41% of the portfolio spread among consumer discretionary, communication services, health care, and other sectors. Of the remaining 59%, 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.
The Schwab US Large-Cap Growth ETF (SCHG)
- Net Assets 14.48B
- Price / Earnings Ratio 31.96
- Price / Book Ratio 7.68
- YTD Daily Total Return -30.55%
- Yield 0.56%
- Expense Ratio 0.04%
- Number of Holdings 41
- Top Holdings Apple (AAPL), Microsoft (MSFT), Amazon (AMZN)
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