Why the Schwab U.S. Large-Cap Growth ETF Stands Out as a Top Growth Index ETF for New Investors

Simple Yet Powerful: The Foundation of This Growth Index ETF

Investors seeking the best etf to invest in with just $100 should consider how simple can be incredibly effective. The Schwab U.S. Large-Cap Growth ETF (NYSEMKT: SCHG) proves this point. With $53.34 billion in assets, this growth index ETF tracks the Dow Jones U.S. Large-Cap Growth Total Stock Market index, a methodology refined over two decades. Rather than attempting to pick winners, the fund scans for large-cap domestic companies meeting specific growth metrics around earnings and revenue expansion, assembling a portfolio of nearly 200 stocks weighted by market value.

This straightforward approach has delivered impressive results. Over the past decade, the Schwab fund has surpassed several competing growth index ETFs in the category. Looking back even further, it outperformed its peer group average during its first 15 years of operation, stumbling only twice. The consistency speaks volumes about why this might be the best etf to invest in for hands-off investors.

The Active Manager Problem: Why Passive Wins

The financial landscape for large- and megacap growth stocks moves rapidly. Technology leaders like Nvidia (NASDAQ: NVDA) and Tesla (NASDAQ: TSLA) have reshaped market dynamics, making it notoriously difficult for active managers to maintain their competitive edge.

Consider the data: only 10% of active growth managers beat the Russell 1000 Growth Index over the 10-year period ending February 2025. Their performance barely improved across one-, three-, and five-year timeframes. While skilled active managers certainly exist, consistently outperforming benchmarks remains elusive. The Schwab fund sidesteps this challenge entirely—investors receive performance aligned with the underlying index, minus a minimal annual charge. The fund’s disciplined approach to keeping portfolio turnover low further distinguishes it from actively managed competitors that frequently shuffle holdings.

Affordable Access to the “Magnificent Seven” and Beyond

One compelling advantage: this growth index ETF holds all seven “Magnificent Seven” stocks within its top 10 positions, collectively representing nearly half the fund’s value. This provides concentrated exposure to dominant AI-driven companies through a diversified vehicle.

The cost structure solidifies the case for smaller investors. With an annual expense ratio of just 0.04%—or $4 on a $10,000 position—the Schwab fund minimizes drag on returns. For buy-and-hold investors and those new to markets, combining broad access to AI leaders with minimal fees creates a compelling value proposition.

Should You Make This Your Next Investment?

While the Schwab U.S. Large-Cap Growth ETF offers genuine appeal as a best etf to invest in for core portfolio building, investors should conduct thorough due diligence. Market conditions, personal risk tolerance, and individual financial goals should guide any investment decision. The ETF’s track record and structural advantages make it worth serious consideration, though no single fund is universally appropriate for every investor situation.

The views expressed here are analytical in nature and do not constitute investment advice. Investors should conduct independent research and consult qualified financial advisors before making investment decisions.