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Should Schwab U.S. Small-Cap ETF (SCHA) Be on Your Investing Radar?
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Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the Schwab U.S. Small-Cap ETF (SCHA - Free Report) is a passively managed exchange traded fund launched on 11/03/2009.
The fund is sponsored by Charles Schwab. It has amassed assets over $16.65 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
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 1.34%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 18.30% of the portfolio. Financials and Consumer Discretionary 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 added about 2.11% so far this year and is up about 21.51% in the last one year (as of 03/26/2024). In the past 52-week period, it has traded between $38.13 and $48.70.
The ETF has a beta of 1.16 and standard deviation of 22.37% 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 excellent 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 $63.29 billion in assets, iShares Core S&P Small-Cap ETF has $77.87 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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?
Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the Schwab U.S. Small-Cap ETF (SCHA - Free Report) is a passively managed exchange traded fund launched on 11/03/2009.
The fund is sponsored by Charles Schwab. It has amassed assets over $16.65 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
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 1.34%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 18.30% of the portfolio. Financials and Consumer Discretionary 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 added about 2.11% so far this year and is up about 21.51% in the last one year (as of 03/26/2024). In the past 52-week period, it has traded between $38.13 and $48.70.
The ETF has a beta of 1.16 and standard deviation of 22.37% 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 excellent 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 $63.29 billion in assets, iShares Core S&P Small-Cap ETF has $77.87 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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.