- SCHG provides exposure to large-cap US equities that exhibit growth style characteristics. This ETF runs a concentrated portfolio where the top 10 holdings are likely to drive future returns.
- Growth has been the winning investing style over the last decade thanks to an expansionary monetary policy.
- However, I think there is a paradigm shift in which higher rates pose a fundamental threat to this investing style.
- For the time being, I think that investors who are paying over 25x earnings for growth stocks are in a tough spot and are likely facing more downside risks in the months ahead.
For further details see:
SCHG: Overvalued In A Rising Rate Environment