S&P Bullish On Schwab Large-Cap Growth ETF

With Europe still in flux to put things mildly and rampant speculation that emerging markets growth will slow more than most investors would like to see, perhaps the U.S. equity market is starting to look good by comparison. If that's the case, S&P Capital IQ has an ETF recommendation worth noting. The research issued an “overweight” rating on the Schwab Large-Cap Growth ETF SCHG, saying “We view SCHG as predominantly composed of large-cap U.S. stocks with strong growth characteristics, and we view its underlying holdings as relatively attractive.” SCHG made its debut in December 2009 and now is home to 422 stocks and a paltry expense ratio of 0.13%. The ETF has $288.5 million in assets under management, according to Schwab's Web site. That expense ratio puts SCHG in the 95th percentile of the U.S. ETF universe, according to S&P. “With growing concerns over economic malaise in the Eurozone and questions over the extent to which economic growth may be decelerating in China, focusing on the U.S. market may be seen as somewhat of a relatively safer haven these days. In addition, questions over the solvency of financial institutions, especially in Europe, also suggest to us a preference for large-cap names over small-cap ones,” S&P analyst Stewart Glickman said in the note. Four sectors – technology, consumer discretionary, industrials and health care get double-digit weights in SCHG with enegy not far behind at 9.8%. That said, tech names dominate this fund's weight with an allocation of 30.1%. Apple AAPL Berkshire Hathaway BRK, Cisco CSCO, Google GOOG and Microsoft MSFT are the ETF's top-five holdings. While SCHG has jumped from $25.50 to almost $30 in just the past month, if the ETF can crack resistance at $30 a move to $33 could be in the offing.