FYC vs SCHG

FYCCFirst Trust Small Cap Growth AlphaDEX Fund

SCHGASchwab U.S. Large-Cap Growth ETF

In short

FYC Small-cap growth, but not by market cap. The AlphaDEX screen ranks the Nasdaq US 700 Small Cap universe on growth and value factors, keeps the best scorers, tiers their weights by rank, and reshuffles quarterly. Rules-based stock picking, not index hugging.

SCHG Schwab's growth workhorse: roughly 200 large-cap U.S. growth names for four basis points, one of the cheapest tickets in a crowded category. Running since 2009 and among the most heavily traded growth funds around.

Stated mandate

FYC The fund seeks to track, before fees and expenses, the price and yield performance of the Nasdaq AlphaDEX Small Cap Growth Index through an indexing approach.

SCHG SCHG seeks to track, before fees and expenses, the total return of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index. It generally invests in stocks included in that index, which represents large-cap U.S. growth equities.

Why people hold it

• FYC Weight follows score, not size: selected names are split into quintiles, higher-scoring quintiles get the bigger share of the index, and stocks sit equal-weighted inside each quintile.sec.gov
• The screen blends both sides of the style aisle, ranking on growth factors (3-, 6- and 12-month price moves, sales-to-price, sales growth) and value factors (book-to-price, cash-flow-to-price, return on assets).sec.gov
• The index is reconstituted and rebalanced quarterly, so the roughly 300 small caps it holds get re-scored four times a year instead of riding a static list.sec.gov
• Live since 2011 and now a multi-billion-dollar fund, meaning this methodology has been run through more than one small-cap boom and bust rather than back-tested through them.

• SCHG 0.04% a year against a growth-category median of 0.18%. Costs sit near the floor of the group.
• Hews closely to the Dow Jones U.S. Large-Cap Growth Total Stock Market Index, one of the tighter index implementations in its peer group.
• Live since 2009, a multi-billion-dollar fund, and one of the busier tickers in the growth aisle, so entering and exiting is usually cheap and easy.
• The benchmark is carved out of a total-market growth index, not S&P 500 membership, so a stock does not need an index committee's nod to qualify.

Worth knowing

• FYC Cost is the headline trade-off: 0.70% a year, well above the typical fund in its growth peer group, where cap-weighted options like SPYG, SCHG and VUG run at or below 0.04%.
• The prospectus flags that the quarterly reconstitution schedule may produce a higher rate of portfolio turnover, with the trading costs and in-fund capital gains that can come with it.sec.gov
• Because weights ignore market cap, the fund can concentrate in an industry group when its index does, and it trades only moderately, so spreads deserve a look before you place an order.sec.gov

• SCHG Growth-only by design. Value and dividend-heavy corners of the market sit outside the mandate, so the ride differs from a total-market fund.
• Large-cap U.S. only, roughly 200 stocks. No mid-caps, no small-caps, nothing overseas.
• VUG charges a hair less for a similar broad-growth mandate. A tiny gap, but it is there. Distributions here arrive quarterly.

Full FYC profile⁠

Full SCHG profile⁠