Rising Treasury yields threaten growth stocks in SCHG’s portfolio, which relies on low discount rates for valuations.
The Schwab U.S. Large-Cap Growth ETF (SCHG) closed at $34, up 25% over the past year, but rising 10-year Treasury yields near 4.7% pose a growing risk. Growth stocks, particularly in SCHG’s AI-heavy portfolio, are sensitive to higher discount rates, which could compress valuations.
SCHG tracks the Dow Jones U.S. Large-Cap Growth Index, with nearly half its holdings in tech and communication services. Top positions include NVIDIA, Microsoft, and Amazon, whose guidance could further impact multiples if moderated. The ETF has returned 109% over five years and 467% over a decade.
The yield’s climb to its highest level in a year creates a headwind not seen since early 2025, potentially reshaping SCHG’s performance outlook.