ETF Spotlight: Schwab U.S. Broad Market

Includes: DIA, QQQ, SCHB, SPY
by: Tom Lydon

ETF Spotlight on Schwab U.S. Broad Market (NYSEARCA:SCHB), part of a weekly series.

Assets: $189 million

Objective: Tracks the Dow Jones U.S. Broad Stock Market Index

Holdings: SCHB includes the 2,500 largest companies in the United States and generally gives the same weight to a stock as the index it tracks does; top holdings include Exxon Mobil (NYSE:XOM), Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL) and General Electric (NYSE:GE).

What You Should Know

  • SCHB launched on Nov. 3; since then, it’s up 16.7%.
  • Year-to-date, it’s up 7.9% and is outpacing the S&P 500, which is up 6.2%.
  • SCHB is the most popular fund in Schwab’s lineup.
  • It has an expense ratio 0f 0.08%, one of the lowest on any ETF, and can be traded free on Schwab’s platform [Schwab ETFs Hit $1 Billion in Assets.].
  • The fund is 42.2% giant-cap companies, 30.3% large-cap, 19.9% mid-cap and 7.5% small-cap.
  • The top-weighted sectors are information technology, 18.1%; financial, 17.8%; consumer discretionary, 12.4%; and industrials, 11.7%.

The Latest News

  • This fund may be a good option for investors who want to play the U.S. recovery effort, since it has heavy exposure to some sectors that have been on the move in recent months.
  • The financial sector may be the most troubled, thanks to the Goldman Sachs (NYSE:GS) charges and the threat of sweeping financial reform.
  • Technology has been a post-recession leader; the NASDAQ is the top-performing index, up 16.8% year-to-date. [Tech ETFs Riding High.]
  • Consumer discretionary has been getting some new life as consumers feel a little more free to spend; continuing jobs weakness, though, could derail this sector. [Retail ETFs Near Three-Year Highs.]
  • The industrial sector has been heating up lately as more orders for aircraft come in, auto sales spike and infrastructure investment continues. [Top ETFs to Play Industrials.]