Schwab U.S. Large-Cap ETF SCHX offers a well-diversified, market-cap-weighted portfolio that accurately captures the large- and mid-cap opportunity set while charging a low fee, a recipe for success over the long run. 

The fund tracks the Dow Jones U.S. Large-Cap Total Stock Market Index, which selects the largest 750 U.S. stocks—capturing roughly 90% of the U.S. equity market. The index weights constituents by market cap after applying liquidity and investability screens to ensure the index is easier to track.

The end portfolio is well-diversified and accurately resembles the U.S. large- and mid-cap opportunity set available to active peers. This allows the strategy to mimic active peers while capitalizing on its low fee, ultimately delivering sound long-term performance on both an absolute and risk-adjusted basis. 

The bedrock of this strategy is market-cap-weighting, which harnesses the market's collective wisdom of the relative value of each holding with the added benefit of low turnover and associated trading costs. It's a sensible approach because the market tends to do a good job pricing the stocks that make up this portfolio. Larger stocks attract liquidity and widespread investor attention, such that prices reflect new information quickly.  

However, when few richly valued companies or sectors power most of the market gains, market-cap-weighting may expose the strategy to stock- or sector-level concentration risk. As of January 2024, the top 10 holdings made up the largest portion of the index (29%) in several decades, and the 30% allocation to technology stocks was the highest since the dot-com bubble. But this is not a fault in design, the Dow Jones U.S. Large-Cap Total Stock Market Index simply reflects the market composition. In the long run, its broad diversification, low turnover, and a low fee outweigh these risks.

Analyst Rating

Cheap and broad option for large-cap investors.

Associate Analyst

Mo'ath Almahasneh

Microsoft

Apple

NVIDIA

Amazon

Alphabet

Berkshire Hathaway Inc. - Ordinary Shares - Class B

Eli Lilly

JPMorgan Chase & Co

This fund accurately captures the large- and mid-cap opportunity set, and it keeps a lid on turnover by leveraging the market's collective wisdom to size its positions. It earns a High Process Pillar rating.

High

Process

Schwab has strengthened its equity index management team over the past few years under the leadership of Chris Bliss. It earns an Above Average People Pillar rating.

Bliss leads Schwab's equity index team. Since joining Schwab from BlackRock in 2016, Bliss has strengthened the team by increasing specialization and automating more of the managers' workflow. This allows the managers to spend less time on routine tasks and helps them better identify and resolve issues that require their attention. Ferian Juwono, Jeremy Brown, and Agnes Zau join Bliss as named managers on this fund. The named managers have support from associate managers who help the team prepare for index rebalances.

The team looks for ways to slightly improve returns by handling some corporate actions differently from the index. The managers can take advantage of those opportunities when they occur, under tight tracking-error constraints.

Schwab compensates its managers based on tracking error and compliance with risk management, which helps align their interests with investors'.

Above Average

People

Under new but familiar leadership, Schwab Asset Management Solutions maintains its Above Average Parent Pillar rating. 

After the former Schwab CEO was named president of parent Charles Schwab Corporation in 2022, Omar Aguilar, a Schwab CIO since 2011, was promoted to CEO while retaining his CIO role. Under Aguilar's leadership, Schwab remains focused on core-oriented strategies: More than 95% of the firm's fund assets under management are in low-cost index products that are suitable for the biggest portions of investors' portfolios. Index-tracking remains are par with the best teams in the business.

Recent strategic initiatives show a desire to grow in an increasingly competitive landscape. Forays into direct indexing—which customizes separate accounts through tax-loss harvesting, values-based requests, or other client preferences—as well as some new launches, such as Schwab Municipal Bond ETF, fit the firm's strategic focus and are natural extensions of its capabilities. However, other recent launches in more-niche asset classes, including Schwab Crypto Thematic ETF, contrast previous refusals to enter trendy markets. 

Schwab benefits from its association with its parent's brokerage business. This arrangement and efficient operation allow funds to grow quickly and keep fees in line with larger competitors. Historically, Schwab has been quick to match competitor fee cuts and now sports a 0.09% asset-weighted average fee across its mutual funds and ETFs.

Parent

Schwab U.S. Large-Cap ETF

SCHX tracks a market-cap-weighted index of the 750 largest US companies.

Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the Schwab U.S. Large-Cap ETF (SCHX) is a passively managed exchange traded fund launched on 11/03/2009.

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

Schwab Fundamental International Large Co. Index ETF

Schwab US Dividend Equity ETF

Schwab U.S. Large-Cap Growth ETF

Schwab U.S. REIT ETF

Investing in a broad swath of American companies has long been a powerful move. You might diversify your portfolio, though -- perhaps into international stocks or real estate.

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Consider allocating to the Schwab U.S. Large-Cap ETF for exposure to large-cap stocks. SCHX's top holdings include Microsoft, Apple, NVIDIA, Amazon, and Alphabet, with significant exposure to the Information Technology sector. Pros of investing in the Fund include diversification, low costs, and tax efficiency, while cons include market risk and concentration risk in the IT sector.

SCHX: As Cheap As It Gets For Large-Cap Exposure

U.S. large caps just had another bumper year. An attractive near-term setup means 2024 could well be just as good. As the rally broadens out, owning a broader large-cap basket like SCHX without the small/mid-cap tradeoffs makes a lot of sense.

SCHX: Ride The 'Everything Rally' With Minimal Quality Tradeoffs

September job creation exceeded expectations with 336,000 jobs added, the largest gain since January. The unemployment rate remained unchanged at 3.8% and average hourly earnings rose 4.2% from last year.

September Jobs Blowout: Yields Spike, Stocks Fall, SCHX A Buy Into Year-End

SPDR S&P 500 ETF Trust

Large-cap funds such as Schwab U.S. Large-Cap ETF and SPDR S&P 500 Trust ETF have historically performed almost identically. However, during recent market turmoils, SCHX has diverged from (i.e., underperformed) SPY by a good amount. With SPY's current lofty valuations, I will explore the reasons for this divergence and discuss why it suggests a hiding place for investors.

The SCHX-SPY Divergence Suggests A Hiding Place

The U.S. created 209,000 jobs in June, below the consensus of 230,000, marking the smallest monthly employment advance since December 2020's negative print. The unemployment rate actually dropped to 3.6% from 3.7% in May, while average hourly earnings increased by 0.4%, the highest since July last year and a tick higher than expectations. The jobs data will impact the Federal Reserve's decisions at the upcoming July 26 meeting, with expectations for a quarter-point hike and potential further rate rises later this year.

Jobs Market Cools, Countering ADP's Hot Employment Report, SCHX A Hold

SCHX: Doubling Down On Large-Caps

S&P 500 Not A Value Into Earnings Season, Monitoring Trends In SCHX

It is important to choose the right ETF for the current low-growth environment where there are also talks about a recession. For this purpose, I compare two of Schwab's ETFs, namely SCHG and SCHX.

Choosing Between SCHG And SCHX For A Low-Growth Environment

Should Schwab U.S. LargeCap ETF (SCHX) Be on Your Investing Radar?

American Century Focused Large Cap Value ETF

American Century Diversified Corporate Bond ETF

KraneShares Global Carbon ETF

KFA Small Cap Quality Dividend Index ETF

KraneShares CSI China Internet ETF

Schwab US TIPS ETF

American Century Diversified Municipal Bond

It's that time of year again, as firms start to share their estimated cap gain distributions for their ETFs.

These ETFs Aren't Issuing Cap Gains

Large-cap index funds such as Schwab U.S. Large-Cap ETF (SCHX) and SPDR S&P 500 Trust ETF (SPY) are largely interchangeable for most purposes. Their performance and volatilities have been historically almost identical with a few exceptions, and now is such an exception.

SCHX Vs. SPY: What The Divergence Tells Us

Schwab U.S. Large-Cap ETF is offering a solid buying opportunity for investors who are bullish on the long-term performance of the U.S. equity market. Since there is a greater chance of a shift in the Fed's policy, the risk of more downside is declining.

SCHX: A Solid ETF To Ride Recovery And Outperform In Bull Market

Vanguard S&P 500 ETF

The Schwab U.S. Large-Cap ETF tracks a market-cap-weighted index of the 750 largest US companies. It offers an alternative for investors in addition to typical S&P 500 funds such as the Vanguard S&P 500 ETF.

SCHX Vs. VOO: What's Different And Should You Care?

With the rising interest rate-driven rotation out of the technology sector, the SCHX Large-Cap ETF is down ~9% YTD, which is ~1% worse than the S&P500. However, I'm not in the camp that believes a rise in interest rates to still-historically low levels means doom for the large-cap tech sector.

Schwab Large-Cap ETF SCHX: Size, Scale, Splits, & Cash Rich

Schwab U.S. Small-Cap ETF

Schwab U.S. Broad Market ETF

WESTLAKE, Texas--(BUSINESS WIRE)-- #ETFsharesplits--Schwab Asset Management is announcing forward share splits on five Schwab ETFs.

Schwab Asset Management Announces ETF Share Splits

iShares Core S&P 500 ETF

Vanguard High Dividend Yield ETF

You do not need to buy individual dividend stocks in order to be a dividend stock investor. There are many ways to build a passive income stream on your journey to financial freedom, with dividend income being one of those streams.

You Don't Have To Buy Individual Dividend Stocks To Be A Dividend Investor

SCHX is a $34.4 billion fund that is supposed to track the performance of 750 public U.S. bellwethers. The fund has a razor-thin expense ratio, relatively low risk, and robust asset flows.

SCHX: A Bellwether Portfolio With A Razor-Thin Expense Ratio

My earlier article on the Schwab U.S. Large-Cap ETF (SCHX) focused on its exposure to the large-cap space under the context of a market dashboard. Since then, its price has further appreciated and the current market valuation is at a historical high and the fund has shown large volatility risks in the past.

SCHX: Valuation Risks, Volatility Risks, And Hedging

The Schwab U.S. Large-Cap ETF offers an alternative choice for exposure to the large-cap space. It tracks a market-cap-weighted index of the 750 largest US companies, in contrast to the largest 500 companies typically tracked by the multitude of S&P 500 funds.

SCHX: Large Cap And Market Dashboard

The Schwab U.S. Large-Cap ETF (SCHX) hits a new 52-week high. Are more gains in store?

Large-Cap ETF (SCHX) Hits a New 52-Week High

Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF

iShares Russell 1000 ETF

iShares S&P 100 ETF

TripAdvisor

Given the bullish fundamentals, investors seeking to make profits from further surge in the stock market could consider the following ETFs.

Top-Ranked ETFs to Buy as S&P 500 Nears Record High

First Trust Large Cap Core AlphaDEX Fund

iShares Dow Jones U.S. ETF

Invesco S&P 500 Equal Weight ETF

Vanguard Large-Cap ETF

Q.ai's deep learning algorithms have identified several top US Large Cap Smart Beta ETFs based on fund flows. Diversify your portfolio and mitigate risk with these ETFs.

Artificial Intelligence Ranks Schwab US Large-Cap ETF Best Smart Beta ETF

Invesco QQQ

Invesco S&P 500 Pure Growth ETF

Invesco S&P 500 Pure Value ETF

SPDR Portfolio S&P 500 Growth ETF

SPDR Portfolio S&P 500 Value ETF

Invesco Solar ETF

Vanguard Total Stock Market ETF

iPath S&P 500 VIX Short-Term Futures ETN Class A

Financial Select Sector SPDR Fund

Similar to the six vital nutrients required for good health, we have highlighted six keys for building a healthy ETF portfolio.

News for Schwab U.S. Large-Cap ETF ETF (SCHX)