Generated September 26, 2026.
Overview
SCHG is a broad large-cap growth ETF tracking 750 U.S. stocks classified as growth by market capitalization, while SMH is a concentrated semiconductor-focused ETF holding just 25 companies from the chip industry. The two differ fundamentally in scope: SCHG offers diversified exposure to large-cap growth across all sectors, whereas SMH isolates a single, highly cyclical technology subsector. Both are index-tracking ETFs, but their risk profiles and return drivers are distinct.
How they differ
SCHG holds 750 companies across all growth-classified sectors, while SMH concentrates on 25 semiconductor manufacturers—a single industry subsector. This makes SMH roughly 28 times more concentrated by holding count alone.
SMH's beta of 2.06 nearly doubles SCHG's 1.22, reflecting both semiconductor sector volatility and the amplified swings of a narrow index. Semiconductors are capital-intensive and highly cyclical, with demand driven by chip shortages, geopolitical trade tensions, and macro cycles; broad large-cap growth, by contrast, smooths these shocks across consumer staples, financials, healthcare, and other defensive areas.
SCHG charges 0.04% in expenses—near-zero for an equity ETF—while SMH costs 0.35%, eight times higher. Both funds have large asset bases, though SMH's $74.6B exceeds SCHG's $64.3B, suggesting demand for semiconductor exposure despite the higher fee.
Who each is best for
SCHG: Fits investors seeking broad large-cap growth exposure with minimal drag from fees and volatility below the growth-stock average. Works for core allocations where sector diversification and low costs matter more than concentrated upside.
SMH: Designed for investors with higher risk tolerance who want pure-play semiconductor exposure—betting on chip cycles, AI demand, and industry-specific tailwinds rather than diversified growth. Suits those comfortable with larger drawdowns in exchange for potential outsized gains during chip upcycles.
Key risks to know
- Concentration risk (SMH). Twenty-five holdings means a handful of mega-cap chip designers or manufacturers (Intel, NVIDIA, TSMC, Samsung, Broadcom, and similar) likely dominate the index. A regulatory shock, product failure, or earnings miss at one name can move the fund sharply.
- Semiconductor cyclicality (SMH). Demand for chips swings dramatically with inventory cycles, manufacturing capacity, and macroeconomic sentiment. During downturns, SMH can underperform broad equity markets severely.
- Beta mismatch (SMH vs. SCHG). SMH's 2.06 versus SCHG's 1.22 means SMH amplifies both bull and bear market moves. A 10% market decline would historically correlate to roughly a 20% decline for SMH, while SCHG would decline closer to 12%.
Bottom line
If you want broad, low-cost large-cap growth with steady diversification, SCHG's 0.04% fee, 1.22 beta, and 750-name basket fit a core equity allocation. If you believe semiconductor tailwinds will outpace broader growth and you can tolerate double the volatility and 0.35% in annual costs, SMH offers concentrated exposure to that thesis. Past performance does not predict future results; sector leadership and chip cycles can reverse sharply.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.
