VOO - SCHX: Not Necessary To Own This Fund
2024-05-19 15:14:11 ET
Summary
- Schwab U.S. Large-Cap ETF (SCHX) has a portfolio of 750 largest U.S. stocks, similar to the S&P 500 index.
- SCHX has slightly underperformed the S&P 500 index in the past and is expected to continue to do so.
- The fund is expensive according to the Buffett Indicator, but many stocks in its portfolio has sizable revenues and earnings from international markets.
ETF Overview
Schwab U.S. Large-Cap ETF ( SCHX ) has a portfolio of 750 largest U.S. stocks by market capitalization. The fund has delivered slightly inferior total returns than the S&P 500 index in the past but has very similar portfolio mix, even their top 10 holdings are identical. Most of these top 10 holdings are technology stocks with strong growth potential. They have been the main drivers of SCHX and the S&P 500 index’s performance in the past, and is expected to continue to outperform in the foreseeable future. Given the S&P 500 index only consists of 500 stocks as opposed to SCHX’s 750 stocks, the proportion of the top 10 stocks in SCHX’s portfolio is slightly lower than the S&P 500 index. Therefore, we expect SCHX to continue to slightly underperform the S&P 500 index. Hence, we do not think investors need to own SCHX....
SCHX: Not Necessary To Own This Fund