Dollar Cost Averaging Into the SCHG ETF Worked for Ten Years. This Year It Is Buying You Less Than the SPY.
Quick Read SCHG’s 10-year 445% return crushed the S&P 500’s 254%, but in 2026 the fund lags badly, up only 9% year-to-date. SPY returned 13% and QQQ nearly 19% YTD, both outpacing SCHG as the 2026 rally broadened beyond megacap growth names. For long-runway buyers, SCHG’s 2026 dip buys more shares per contribution; those within…
SCHG’s 10-year 445% return crushed the S&P 500’s 254%, but in 2026 the fund lags badly, up only 9% year-to-date.
SPY returned 13% and QQQ nearly 19% YTD, both outpacing SCHG as the 2026 rally broadened beyond megacap growth names.
For long-runway buyers, SCHG’s 2026 dip buys more shares per contribution; those within five years of retirement face real sequence-of-returns risk.
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A monthly buyer of the Schwab U.S. Large-Cap Growth ETF (NYSEARCA:SCHG) has spent a decade being rewarded for a simple habit. Over the last ten years, SCHG returned about 445% against roughly 254% for the S&P 500, a gap that makes dollar-cost averaging feel like a decision that made itself.
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This year the arithmetic has flipped. SCHG is up roughly 9% year-to-date, while SPY (NYSEARCA:SPY) has returned around 13% and QQQ (NASDAQ:QQQ) has returned nearly 19%.
SCHG’s pitch is owning the fastest-growing large American companies, yet in 2026 it trails both a plain vanilla index fund and the tech-heavy Nasdaq 100. That deserves a closer look before the next automatic contribution goes in.
What SCHG Was Built to Do
SCHG holds the growth half of the U.S. large-cap universe at a very low fee. The fund manages about $61 billion and concentrates it heavily at the top, with the top ten positions accounting for roughly 57% of the fund and NVIDIA (NASDAQ:NVDA) alone at around 11%. That is a bet on the same handful of companies that dominated the last decade.
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The return engine is straightforward: own the megacap growth basket, rebalance to a growth index, and let capital appreciation do the work. For most of the past ten years, that structure was exactly what an accumulator wanted, because the fund tilted into the leaders and stayed there while other strategies churned around them.
Why 2026 Looks Different
The concentration that drove the decade is now dragging on the fund. When leadership broadens, a portfolio where the top ten names carry more than half the weight cannot help but lag a broader benchmark.
The S&P 500 owns the same megacap names but dilutes them with industrials, financials, healthcare, and staples that have participated in this year’s rally. SCHG owns almost none of that ballast.
The Nasdaq 100 has the opposite problem in SCHG’s favor and still beat it, because the growth index SCHG tracks holds positions like Eli Lilly and Costco that have not kept pace with the pure semiconductor and hyperscaler trade. The fund is doing exactly what it says it does, which happens to be the wrong shape for the market that showed up this year.
The Sequence Argument for a Monthly Buyer
For someone still in the accumulation phase, a stalled year is not the same event as a stalled year near retirement. Early in the window, a lower price means each monthly contribution buys more shares, and the eventual recovery lifts a larger share count.
Late in the window, the same stall does real damage, because there is no longer enough time or contribution volume to average down before the balance has to start supporting withdrawals. Planners call this sequence-of-returns risk, and we wrote a free guide on defending the first years of retirement against exactly this problem, here. SCHG’s 2026 underperformance is only a problem if you are close enough to needing the money that this year’s shortfall cannot be diluted by the next several years of buying.
If you have ten or more years of contributions ahead of you, this year is neutral at worst and quietly useful at best.
Who Should Keep Going and Who Should Not
An accumulator with a long runway should keep the automatic buys running. The fund’s structure has not changed; the fee is still low; and the shares you buy in a lagging year are the ones that compound the hardest if leadership returns.
Someone who has held the account for roughly five years should stop treating SCHG as a core holding and start treating it as a satellite. The concentration that helped for a decade is a real risk when there is no time left to wait out a rotation.
A simpler alternative for the core role is a plain S&P 500 fund, which holds the same leaders, offers greater diversification, and charges a comparable fee. The read on 2026 is that SCHG is doing what it was designed to do, and whether that is a problem depends entirely on where you sit in your own timeline.
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Contact editorial@247wallst.com for any questions or corrections.
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