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Launched on 12/11/2009, the Schwab U.S. Large-Cap Value ETF (SCHV) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.

The fund is sponsored by Charles Schwab. It has amassed assets over $10.80 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.

While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.

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 2.28%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Financials sector--about 21.30% of the portfolio. Industrials and Healthcare round out the top three.

Looking at individual holdings, Berkshire Hathaway Inc Class B (BRK/B) accounts for about 3.41% of total assets, followed by Jpmorgan Chase (JPM) and Exxon Mobil Corp (XOM).

The top 10 holdings account for about 18.46% 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 added about 7.10% so far this year and is up about 17.40% in the last one year (as of 05/10/2024). In the past 52-week period, it has traded between $61.16 and $75.98.

The ETF has a beta of 0.94 and standard deviation of 15.02% for the trailing three-year period, making it a medium risk choice in the space. With about 506 holdings, it effectively diversifies company-specific risk.

Alternatives

Schwab U.S. Large-Cap Value ETF holds a Zacks ETF Rank of 2 (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 Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $55.57 billion in assets, Vanguard Value ETF has $115.30 billion. SCHD has an expense ratio of 0.06% 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.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.