The Schwab US Large-Growth ETF (SCHG) has been on a remarkable rally, reaching an all-time high and surging over 82% from its 2022 low. This growth is largely attributed to the strong performance of big-cap technology companies. Meanwhile, the Schwab US Dividend Equity ETF (SCHD) has also done well, although its performance has trailed the market. Despite their differences, these two ETFs complement each other, making them an attractive combination for investors.

SCHG is a leading ETF that focuses on investing in the biggest growth companies in the United States. Its portfolio consists of 250 companies, with an expense ratio of 0.04% and over $28 billion in assets. The ETF is heavily weighted towards information technology, communication services, consumer discretionary, and healthcare sectors. Its goal is to invest in companies with strong balance sheets and revenue growth.

On the other hand, SCHD is a giant fund with over $60 billion in assets, tracking the Dow Jones US Dividend 100 Index. It focuses on companies with a track record of generating strong dividend growth. Its portfolio consists of companies like Texas Instrument, Amgen, Pfizer, PepsiCo, and Lockheed Martin, with a significant presence in the financials, healthcare, consumer staples, industrials, and energy sectors.

Given their different investment objectives, SCHG and SCHD have distinct portfolios. SCHG aims to generate returns for its holders, while SCHD focuses on providing regular dividend growth to its investors. Despite their differences, both ETFs have performed well over the years, with SCHG's total return standing at 145.9% and SCHD's at 78% over the past five years.

The divergence in their performance is largely due to the dominance of the technology sector in recent years. SCHG's exposure to this sector has contributed to its outperformance, while SCHD's limited exposure has hindered its growth. Therefore, investing in SCHD alone may not be sufficient, and combining it with a growth-oriented ETF like SCHG can provide a more balanced portfolio.

SCHG offers a cheaper alternative to other growth-oriented ETFs like QQQ and PWB, and has often outperformed them in recent years. Its total return over the past three years stands at 42.4%, compared to 40% and 32% for QQQ and SPY, respectively. Therefore, investors in SCHD may consider complementing their portfolio with SCHG or other related ETFs to achieve a more balanced and growth-oriented investment strategy.