SCHG Owns More Apple Than Tesla, Meta and Palantir Combined. Is That Why Growth Investors Are Falling Behind?

Apple Inc. (AAPL) commands a substantial 9.83% allocation in the Schwab U.S. Large-Cap Growth ETF (SCHG), an allocation exceeding the combined weightings of Tesla (3.91%), Meta Platforms (3.45%), and Palantir Technologies (1.25%). Alongside Nvidia at 11.01% and Microsoft at 7.17%, these top three positions control nearly one-third of the entire fund. Consequently, the supposedly diversified fund operates effectively as a concentrated mega-cap vehicle. While Apple shares gained 21.06% year-to-date, propelled by a record $109.4 billion June quarter featuring double-digit expansion across iPhone, Mac, and Services, SCHG still underperformed broader benchmarks. The fund rose 10.12% year-to-date, trailing the SPDR S&P 500 ETF Trust (SPY) return of 13.38%. This gap was driven by strict index rules capping high-flying growth leaders like Palantir at low weights while maintaining large allocations to sluggish mega-caps and declining names like Tesla.