Investing

Schwab SCHG ETF Successfully Pulls Off 4-for-1 Stock Split

Joel South

Published: October 11, 2024 1:17 pm

Schwab Asset Management conducted stock splits for 20 ETFs, with October 11th being the first day each ETF is trading at its split-adjusted price. Schwab’s U.S. Large-Cap Growth ETF (SCHG), one of the company’s more popular ETFs, underwent a 4-for-1 split. Here’s a breakdown of what this means for current and potential investors, along with insights into who the fund is best suited for and a look at its top holdings.

24/7 Wall St. Insights

• SCHG  wrapped up a 4-1 stock split with trading commencing at the new price on Oct. 11th
• The new price for the ETF is $26.28
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Impact of the SCHG 4-for-1 Split

For current SCHG holders, the 4-for-1 split does not change the overall value of their investment but does increase the number of shares they own while reducing the price per share.

• Lower Share Price, Same Investment Value: Before the split, SCHG was trading at $103.90 per share. After the 4-for-1 split, the price per share is approximately $26.28, while shareholders now own four times as many shares. For example, if an investor held 100 shares worth $10,390 pre-split, they would now own 400 shares post-split, with the total investment value remaining unchanged.
• Increased Accessibility: By reducing the price per share, SCHG becomes more affordable for individual investors who prefer purchasing full shares rather than fractional ones. The lower price point could attract more investors, particularly those looking to gain exposure to high-growth U.S. companies at a lower entry price.

Who Is the Market for SCHG ETF?

SCHG is an ETF designed for growth-oriented investors who seek exposure to large-cap U.S. companies with a strong potential for capital appreciation. The fund focuses on firms that are expected to grow faster than the broader market, making it well-suited for:

• Long-term growth investors: Those looking for capital appreciation over time, as the ETF targets companies that have shown the ability to expand at an above-average rate.
• Investors seeking tech and growth exposure: SCHG is heavily weighted toward technology and consumer discretionary sectors, which are often high-growth areas of the economy.
• Cost-conscious investors: With a low expense ratio of 0.04%, SCHG provides a cost-effective way to invest in large-cap growth companies.
• Magnificent 7 Exposure: Over 50% of the ETF is currently part of the 7 largest U.S. companies (AAPL, NVDA, MSFT, AMZN, META, GOOG, TSLA)

Top Holdings in SCHG

SCHG holds 231 stocks, with a significant portion of its assets concentrated in well-known, high-growth companies, particularly in the technology sector. Below are the top 10 holdings in SCHG, representing a large portion of the fund: