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Should Schwab U.S. Small-Cap ETF (SCHA) Be on Your Investing Radar?
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Looking for broad exposure to the Small Cap Blend segment of the US equity market? You should consider the Schwab U.S. Small-Cap ETF (SCHA - Free Report) , a passively managed exchange traded fund launched on 11/03/2009.
The fund is sponsored by Charles Schwab. It has amassed assets over $16.04 billion, making it one of the largest ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.04%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.45%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 17.30% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Nutanix Inc Class A (NTNX - Free Report) accounts for about 0.33% of total assets, followed by Light Wonder Inc (LNW - Free Report) and Us Steel Corp (X - Free Report) .
The top 10 holdings account for about 2.54% of total assets under management.
Performance and Risk
SCHA seeks to match the performance of the Dow Jones U.S. Small-Cap Total Stock Market Index before fees and expenses. The Dow Jones U.S. Small-Cap Total Stock Market Index includes the small-cap portion of the Dow Jones U.S. Total Stock Market Index actually available to investors in the marketplace.
The ETF has lost about -1.84% so far this year and was up about 9.10% in the last one year (as of 01/23/2024). In the past 52-week period, it has traded between $38.13 and $48.02.
The ETF has a beta of 1.18 and standard deviation of 22.83% for the trailing three-year period, making it a medium risk choice in the space. With about 1740 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab U.S. Small-Cap ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SCHA is an outstanding option for investors seeking exposure to the Style Box - Small Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P Small-Cap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $63.31 billion in assets, iShares Core S&P Small-Cap ETF has $76.48 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should Schwab U.S. Small-Cap ETF (SCHA) Be on Your Investing Radar?
Looking for broad exposure to the Small Cap Blend segment of the US equity market? You should consider the Schwab U.S. Small-Cap ETF (SCHA - Free Report) , a passively managed exchange traded fund launched on 11/03/2009.
The fund is sponsored by Charles Schwab. It has amassed assets over $16.04 billion, making it one of the largest ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.04%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.45%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 17.30% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Nutanix Inc Class A (NTNX - Free Report) accounts for about 0.33% of total assets, followed by Light Wonder Inc (LNW - Free Report) and Us Steel Corp (X - Free Report) .
The top 10 holdings account for about 2.54% of total assets under management.
Performance and Risk
SCHA seeks to match the performance of the Dow Jones U.S. Small-Cap Total Stock Market Index before fees and expenses. The Dow Jones U.S. Small-Cap Total Stock Market Index includes the small-cap portion of the Dow Jones U.S. Total Stock Market Index actually available to investors in the marketplace.
The ETF has lost about -1.84% so far this year and was up about 9.10% in the last one year (as of 01/23/2024). In the past 52-week period, it has traded between $38.13 and $48.02.
The ETF has a beta of 1.18 and standard deviation of 22.83% for the trailing three-year period, making it a medium risk choice in the space. With about 1740 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab U.S. Small-Cap ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SCHA is an outstanding option for investors seeking exposure to the Style Box - Small Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P Small-Cap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $63.31 billion in assets, iShares Core S&P Small-Cap ETF has $76.48 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.