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

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

Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider the Schwab U.S. LargeCap Value ETF (SCHV), a passively managed exchange traded fund launched on 12/11/2009.

The fund is sponsored by Charles Schwab. It has amassed assets over $10.04 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.

Why Large Cap Value

Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.

Costs

When considering an ETF’s total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.04%, making it the least expensive products in the space.

It has a 12-month trailing dividend yield of 2.05%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Financials sector–about 19.20% of the portfolio. Healthcare and Industrials round out the top three.

Looking at individual holdings, Berkshire Hathaway Inc Cl B Common Stock Usd.0033 (BRK.B) accounts for about 2.44% of total assets, followed by Jpmorgan Chase + Co Common Stock Usd1.0 (JPM) and Johnson + Johnson Common Stock Usd1.0 (JNJ).

The top 10 holdings account for about 15.86% of total assets under management.

Performance and Risk

SCHV seeks to match the performance of the Dow Jones U.S. Large-Cap Value Total Stock Market Index before fees and expenses. The Dow Jones U.S. Large-Cap Value Total Stock Market Index is a float-adjusted market capitalization weighted index containing the large-cap value portion of the Dow Jones U.S. Total Stock Market Index.

The ETF has lost about -5.89% so far this year and it’s up approximately 7.49% in the last one year (as of 03/16/2022). In the past 52-week period, it has traded between $63.74 and $74.19.

The ETF has a beta of 0.97 and standard deviation of 23.02% for the trailing three-year period, making it a medium risk choice in the space. With about 542 holdings, it effectively diversifies company-specific risk.

Alternatives Schwab U.S. LargeCap Value ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SCHV is an outstanding option for investors seeking exposure to the Style Box – Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $56.27 billion in assets, Vanguard Value ETF has $98.50 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%. Bottom-Line Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center . Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >> Click to get this free report Schwab U.S. LargeCap Value ETF (SCHV): ETF Research Reports JPMorgan Chase & Co. (JPM): Free Stock Analysis Report Johnson & Johnson (JNJ): Free Stock Analysis Report Berkshire Hathaway Inc. (BRK.B): Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports iShares Russell 1000 Value ETF (IWD): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research The views and opinions expressed herein are the views and opinions of […]

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