Investing

3 Schwab ETFs Growth Investors Should Focus On For Big Gains

Chris MacDonald

Published: February 19, 2025 4:58 pm

Last Updated: February 19, 2025 4:59 pm

Schwab is among the top exchange traded fund (ETF) providers in the market, offering a diverse range of options for investors. With more than 3,000 available ETFs to choose from, some of which are available to be traded with zero commissions (and near-zero management expense ratios), these are top products long-term passive investors gravitate toward to maximize their long-term returns.

While traditional index funds are the most commonly-traded ETF products out there, Schwab and other providers allow investors plenty of choice for funds that track various sectors or trends. The stock market can be sliced and diced a million different ways. And rest assured, Schwab is among the companies that has done an amazing job of providing a range of well-diversified options perfect for cost-conscious investors.

The following three ETFs are among the best-performing products offered by Schwab of late, and are generally more attuned to long-term growth investors. Here’s why these three funds are on my radar right now.

Key Points About This Article:

• Schwab is among the top ETF providers with a vast array of exchange traded fund products for long-term investors to choose from.
• For those looking to tilt their portfolios more toward growth, here are three top options that may be worth considering right now.
• 4 million Americans are set to retire this year. If you want to join them, click here now to see if you’re behind, or ahead. It only takes a minute. (Sponsor)

Schwab Fundamental Emerging Markets Equity ETF (FNDE)

U.S. stocks have grown to valuations that have some investors antsy about investing right now. For older investors looking to put capital at risk, diversifying one’s portfolio toward global markets with better valuations (and arguably better growth prospects) may be more attractive.

One great option for such investors may be the Schwab Fundamental Emerging Markets Equity ETF (FNDE). This ETF presents a compelling investment opportunity for those considering emerging markets exposure in 2025, and thus far, this year has turned out to be quite positive for investors who have done so. A number of reports have circulated suggesting that EM stocks have outperformed U.S. stocks to start the year, something that’s been a rarity in years past.

Schwab Fundamental U.S. Large Cap ETF (FNDX)

Investors looking to stick closer to the U.S. market may want to consider the Schwab Strategic Trust – Schwab Fundamental U.S. Large Cap ETF (FNDX) instead. Unlike FNDE, FNDX provides exposure to only the large-cap value segment of the market. This means that while some higher-priced (and higher growth) tech stocks may be excluded or weighted lower than in broader indices, investors seeking a value tilt in the still-strong U.S. market can benefit from this fund.

While the FNDX ETF has provided investors with strong historical performance (with an annualized return of 11.34% since inception), this return has lagged in higher-growth years, reflective of the more defensive holdings held in this ETF. That said, for investors looking to take a more defensive tone in this current environment, this ETF may be the best overall choice for large-cap exposure

With a relatively low expense ratio of 0.25%, investors gain the kind of more active diversification they may be looking for, for a reasonable fee. Now, this expense ratio is on the higher end of the range of funds I typically look at, and that’s one consideration investors will need to factor into their analysis as to whether this is a holding that makes sense. However, this is also a fund I think provides the kind of quasi-active management style many investors are after, and that’s why I think it’s an option worth considering.

Schwab U.S. Large-Cap Growth ETF (SCHG)

The Schwab U.S. Large-Cap Growth ETF (SCHG) stands out as a compelling investment choice for 2025 due to its strong historical performance and low expense ratio. As of January 24, 2025, SCHG is priced at $28.90, reflecting a year-to-date gain of approximately 34.95% and an impressive annualized return of 34.95% over the past year. Over longer periods, SCHG has consistently outperformed the broader market, with annualized returns of 11.38% over three years and 19.75% over five years.

The ETF’s portfolio is heavily weighted towards high-quality growth stocks, with a significant portion of its top holdings rated highly by analysts, further enhancing its attractiveness. SCHG’s low expense ratio of just 0.06% allows investors to retain more of their returns compared to many other funds, making it cost-effective for long-term growth strategies. Additionally, the fund has garnered a “Strong Buy” consensus rating from analysts, indicating confidence in its future performance.

With a market capitalization of approximately $37.16 billion and a potential upside price target of $31.92, SCHG presents itself as a solid option for both new and seasoned investors looking to capitalize on growth opportunities in 2025.