Schwab U.S. Broad Market ETF (SCHB)SCHB

Summary of ETF Schwab U.S. Broad Market ETF (SCHB)

Profile:

Schwab U.S. Broad Market ETF (SCHB) is a passively managed ETF that tracks the performance of the Dow Jones U.S. Broad Stock Market Index. It provides broad exposure to the U.S. equity market, including large-, mid-, and small-cap stocks across various sectors.

Objective:

The primary investment goal of SCHB is to provide investors with low-cost, convenient access to the overall U.S. stock market performance. It aims to replicate the return of its underlying index and does not actively manage its portfolio.

Issuer:

SCHB is issued and managed by Charles Schwab Investment Management, Inc., a subsidiary of the Charles Schwab Corporation.

• Reputation and Reliability: Charles Schwab is a well-established and respected financial institution with a long history of providing investment products and services.
• Management: The ETF is managed by a team of experienced investment professionals with expertise in index tracking and portfolio management.

Market Share:

SCHB is one of the largest broad market ETFs, with a market share of approximately 3.5% in the U.S. broad market ETF category.

Total Net Assets:

As of November 30, 2023, SCHB had total net assets of approximately $85 billion.

Moat:

SCHB's competitive advantages include its low expense ratio, broad market exposure, and strong track record of performance. Its low cost and diversification make it an attractive option for investors seeking a core holding in their portfolio.

Financial Performance:

Historical Performance: SCHB has historically outperformed its benchmark index, the Dow Jones U.S. Broad Stock Market Index, over various time periods. Since its inception in 2009, SCHB has delivered an average annual return of 11.6%, compared to 10.8% for the index.

Benchmark Comparison: SCHB has consistently outperformed its benchmark index, with a cumulative outperformance of approximately 7.5% since its inception.

Growth Trajectory:

SCHB's growth trajectory is closely tied to the overall performance of the U.S. stock market. With the continued growth of the U.S. economy and corporate profits, SCHB is expected to continue to grow its assets and deliver positive returns to investors.

Liquidity:

Average Trading Volume: SCHB has a high average daily trading volume, exceeding 5 million shares, indicating its high liquidity and ease of trading.

Bid-Ask Spread: The bid-ask spread for SCHB is typically tight, around 0.01%, ensuring minimal trading costs.

Market Dynamics:

The U.S. stock market is the largest and most liquid in the world, making it a significant driver of SCHB's performance. Factors such as economic growth, interest rates, inflation, and geopolitical events can impact the market and, consequently, SCHB's price.

Competitors:

Major competitors of SCHB include:

• iShares Core S&P 500 ETF (IVV) - Market Share: 4.5%
• Vanguard Total Stock Market ETF (VTI) - Market Share: 4.2%
• SPDR S&P 500 ETF (SPY) - Market Share: 3.8%

Expense Ratio:

SCHB has a low expense ratio of 0.03%, making it one of the most cost-efficient broad market ETFs available.

Investment approach and strategy:

• Strategy: SCHB tracks the Dow Jones U.S. Broad Stock Market Index, which includes approximately 2,500 U.S. stocks across various sectors and market capitalizations.
• Composition: SCHB invests in a diversified portfolio of U.S. stocks, representing approximately 95% of the total U.S. equity market capitalization.

Key Points:

• Low-cost, broad market exposure
• Strong track record of performance
• High liquidity
• Diversified portfolio
• Experienced management team

Risks:

• Volatility: SCHB is subject to market volatility, which can lead to fluctuations in its price.
• Market Risk: The ETF's performance is tied to the overall U.S. stock market, which can be impacted by various economic and geopolitical factors.

Who Should Consider Investing:

SCHB is suitable for investors seeking:

• A low-cost, convenient way to invest in the U.S. stock market
• Broad market exposure
• Long-term capital appreciation

Evaluation of ETF Schwab U.S. Broad Market ETF's fundamentals using an AI-based rating system on a scale of 1 to 10, titled 'Fundamental Rating Based on AI':

Fundamental Rating Based on AI: 9.5

SCHB receives a high AI-based rating, indicating strong fundamentals across various categories. Its low expense ratio, diversified portfolio, strong track record, and experienced management team contribute to its high rating. However, its exposure to market volatility and dependence on the U.S. stock market performance are factors to consider.

Resources and Disclaimers:

Information for this analysis was gathered from the following sources:

• Charles Schwab website: https://www.schwab.com/etfs/
• ETF Database: https://etfdb.com/
• Morningstar: https://www.morningstar.com/

Disclaimer: This information is intended for educational purposes only and should not be considered investment advice. It is essential to conduct your own research and consult with a financial advisor before making any investment decisions.