Best Charles Schwab Index Funds

Cut to the chase: The best Charles Schwab Index Fund is the Schwab US Large-Cap ETF.

There are thousands of companies listed on major stock exchanges such as NASDAQ and the NYSE. As an investor, picking the right stocks individually to invest in can be a challenge. If you’re new to investing, consider putting your money with index funds to build a better portfolio and earn bigger profits. Here is Benzinga's list of the best Schwab index funds.

Quick Look: Best Schwab Index Funds

• Schwab US Large-Cap ETF
• Schwab International Equity ETF
• Schwab US Broad Market ETF
• Schwab US Dividend Equity ETF
• Schwab US Tips ETF

Best Schwab Index Funds Right Now

Schwab is the 3rd-largest provider of index mutual funds. The combined assets under management (AUM) of Schwab index funds and Schwab ETFs is $255.8 billion. 

You can consider investing in these Schwab index funds and ETFs: 

1. Schwab US Large-Cap ETF (NYSEARCA: SCHX)

Schwab US Large-Cap ETF has been on the market since 2009. It tracks the Dow Jones U.S. Large-Cap Total Stock Market Index and has holdings in 756 companies. This index fund focuses on companies from industrial sectors such as information technology, health care, consumer discretionary and financial services. Schwab US Large-Cap ETF consists of large-cap companies in North America that include Apple, Microsoft, Amazon.com, Facebook and Alphabet.

2. Schwab International Equity ETF (NYSEARCA: SCHF)

Schwab International Equity ETF has been open to trade since 2009. It tracks the FTSE Developed ex US Index and has holdings in 1,524 companies. The index fund focuses on multinational companies from industrial sectors such as health care, consumer staples, information technology and communication services. Schwab International Equity ETF includes companies such as Nestle, Roche, Novartis and Samsung.  

3. Schwab US Broad Market ETF (NYSEARCA: SCHB)

Schwab US Broad Market ETF was launched in 2009. It tracks the Dow Jones U.S. Broad Stock Market Total Return Index and has holdings in 2,404 companies. The index fund focuses on companies from industrial sectors such as information technology, health care and financial services. Schwab US Broad Market ETF consists of North American companies such as Apple, Johnson & Johnson, Visa and JPMorgan Chase. 

4. Schwab US Dividend Equity ETF (NYSEARCA: SCHD)

Schwab US Dividend Equity ETF has been on the market since 2011. It tracks the Dow Jones U.S. Dividend 100™ Index and has holdings in 103 companies. The index fund focuses on companies from industrial sectors such as financial services, consumer staples and communication services. Schwab US Dividend Equity ETF consists of North American companies such as Blackrock, Qualcomm, 3M and Verizon. 

5. Schwab US TIPS ETF (NYSEARCA: SCHP)

Traders have been investing in Schwab US Tips ETF since 2010. It tracks the Bloomberg Barclays U.S. Treasury Inflation-Linked Bond Index and has holdings in 48 U.S. government securities. 

Other Index Fund Brokerages

Take a look at some of the top online brokers on the market. 

Advantages

Here’s a rundown of the pros of investing in index funds. 

• Index funds are passively managed. Fund managers are regularly tracking the performance of the index funds. 

• You can choose from hundreds of low-cost index funds and ETFs to invest in. Most index funds have expense ratios of less than 1% and trade free of commission. 

• You can instantly diversify your portfolio by investing in index funds. ETFs and index funds constitute a broad range of multi-cap companies from different industrial verticals.

• Index funds do not actively execute buy and sell positions throughout the day and reduce capital gains. As a result, investing in index funds can be tax-efficient compared to other investments.

• Most index funds are highly liquid. Millions of index fund and ETF shares are traded every day. 

Disadvantages

Here’s a rundown of the cons of investing in index funds. 

• Market indices can move their positions rapidly during the day. Due to the frequent fluctuations in stock prices, the index funds may not track the market indices precisely in real-time.

• Index funds with high expense ratios can take a significant cut from your profits. Investors planning to buy-and-hold shares of index funds must consider recurring costs in the long run. 

Schwab Index Funds Can Strengthen Your Portfolio

Schwab index funds enable you to own shares in hundreds of growing companies with ease and efficiency. Passively managed index funds from Schwab can also lower the risk of incurring losses from short-term market volatility. The low cost of investing in index funds has attracted new investors to earn better returns and secure a better financial future. 

Frequently Asked Questions