The Charles Schwab Corp. is a major player in the ETF space, with more than $40 billion invested in its own exchange-traded funds (ETFs). Although it still trails market leaders BlackRock Inc., the Vanguard Group and State Street Corp. in ETF assets, Schwab has utilized innovative management platforms and competitive pricing to promote aggressive market share growth. Its OneSource ETF platform allows commission-free online investing into more than 200 Schwab and non-Schwab ETFs. Much of its growth over the last few years has been triggered by its competitive pricing, with the intent of becoming the lowest-cost ETF provider.
In November 2016, BlackRock announced a cut in fees on seven of its iShares Core ETFs, including its $2.7 billion iShares Core S&P Total Stock Market ETF (NYSEACRA: ITOT). Schwab responded less than a day later by vowing to match the cut on its $4.9 billion Schwab US Large-Cap ETF (NYSEACRA: SCHX). Five of Schwab's largest ETFs, all ranked four and five stars by Morningstar, are also among its lowest-cost ETFs.
Schwab US Broad Market ETF
The Schwab US Broad Market ETF (NYSEACRA: SCHB) is Schwab’s largest ETF, with $5.5 billion in assets under management (AUM). The fund offers a low-cost way to gain exposure to the entire U.S. stock market by investing in more than 2,500 of the largest publicly traded stocks on the Dow Jones U.S. Broad Stock Market Index. The fund's portfolio is represented by all sectors of the economy, but its largest weightings are in the technology, health care and financial services sectors. As of March 8, 2016, its five largest holdings, representing 8.92% of its portfolio, are Apple Inc. (NYSE: AAPL), Microsoft Corp. (NASDAQ: MSFT), Exxon Mobile Corp. (NYSE: XOM), Johnson & Johnson (NYSE: JNJ) and General Electric Co. (NYSE: GE). The fund’s trailing 12-month yield is 2.12%, and it has returned 10.27% over the last five years. It has gained 3.14% year-to-date (YTD) in 2016, and its expense ratio is just 0.04%.
Schwab US Large-Cap ETF
Schwab’s second-largest ETF, the Schwab US Large-Cap ETF (NYSEACRA: SCHX), has $5.13 billion in AUM. Its primary benchmark is the Standard & Poor’s 500 Index (S&P 500 Index). Although the fund’s objective is to closely track the index, its 750 holdings include mid-cap stocks, which provide the potential to boost returns in a positive market. As of March 8, 2016, it is most heavily weighted in the technology, health care and financial services sectors. Its five largest holdings, representing 10.01% of its portfolio, are Apple Inc., Microsoft Corp., Exxon Mobile Corp., Johnson & Johnson and General Electric Co. Its trailing 12-month yield is 2.15%, and it has returned 10.46% over the last five years. It has gained 3.07% YTD, and its expense ratio is a rock bottom 0.03%.
Schwab US Dividend Equity ETF
The Schwab US Dividend Equity ETF (NYSEACRA: SCHD) is a favorite among investors seeking high-dividend yields. It has $3.12 billion in AUM, as of March 8, 2016. Its objective is to match the performance and yield of the Dow Jones U.S. Dividend 100 Index by investing in stocks that have a record of consistently paying and increasing dividends. The fund’s portfolio is heavily weighted toward consumer defensive, technology, industrials and energy stocks. Its top holdings include dividend-paying giants Verizon Communications Inc. (NSYE: VZ), Exxon Mobile, Procter & Gamble Co. (NYSE: PG), Johnson & Johnson and Microsoft, which contribute to a trailing 12-month yield of 3.02%. The fund has returned 10.74% over the last three years, and its 2016 YTD return is 1.04%. It charges an expense ratio of 0.07%.
Schwab US Large-Cap Growth ETF
The Schwab US Large-Cap Growth ETF (NYSEACRA: SCHG) is among the lowest-cost large-cap growth ETFs available. As of March 8, 2016, the fund has $2.47 billion in AUM. Its objective is to closely track the performance of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index. The largest weightings in the fund's portfolio are in the technology, health care and consumer cyclical sectors. Its top five holdings, representing a combined 16.4% of the portfolio, are Apple Inc., Berkshire Hathaway Inc. B (NYSE: BRK.B), Facebook Inc. A (NASDAQ: FB), Amazon.com Inc. (NASDAQ: AMZN), and Alphabet Inc. A (NASDAQ: GOOGL). The fund has returned 10.96% over the last five years and 12.12% over the last three years. Its YTD return is -5.13%, and it charges an expense ratio of 0.06%.
Schwab US Large-Cap Value ETF
The Schwab U.S. Large-Cap Value ETF (NYSEACRA: SCHV) is among the lowest-cost investments for gaining exposure to large-value stocks. The fund seeks to closely track the performance and yield of the Dow Jones U.S. Large-Cap Value Total Stock Market Index. The fund’s heaviest weightings are in defensive sectors such as the technology, consumer defensive, technology and health care sectors. Its largest holdings are in big dividend-paying companies such as Microsoft, Exxon Mobil, Johnson & Johnson, General Electric and AT&T Inc. (NYSE: T). The fund’s trailing 12-month yield is 2.80%. It has returned 9.83% over the last five years and 8.71% over the last three years. Its 2016 YTD return is 1.13%, and it charges an expense ratio of 0.06%.