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Should Schwab U.S. SmallCap ETF (SCHA) Be on Your Investing Radar?
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Launched on 11/03/2009, the Schwab U.S. SmallCap ETF (SCHA - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Charles Schwab. It has amassed assets over $16.18 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 are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.04%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.29%.
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 Financials sector--about 16.80% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Cloudflare Inc Class A Common Stock Usd.001 (NET - Free Report) accounts for about 0.60% of total assets, followed by Amc Entertainment Hlds Cl A Common Stock Usd.01 (AMC - Free Report) and Caesars Entertainment Inc Common Stock (CZR - Free Report) .
The top 10 holdings account for about 3.62% 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 -8.62% so far this year and is down about -4.16% in the last one year (as of 03/03/2022). In the past 52-week period, it has traded between $88.84 and $110.14.
The ETF has a beta of 1.20 and standard deviation of 28.69% for the trailing three-year period, making it a medium risk choice in the space. With about 1854 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab U.S. SmallCap 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 a great 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 SmallCap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $62.13 billion in assets, iShares Core S&P SmallCap ETF has $71.51 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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. SmallCap ETF (SCHA) Be on Your Investing Radar?
Launched on 11/03/2009, the Schwab U.S. SmallCap ETF (SCHA - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Charles Schwab. It has amassed assets over $16.18 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 are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.04%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.29%.
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 Financials sector--about 16.80% of the portfolio. Industrials and Healthcare round out the top three.
Looking at individual holdings, Cloudflare Inc Class A Common Stock Usd.001 (NET - Free Report) accounts for about 0.60% of total assets, followed by Amc Entertainment Hlds Cl A Common Stock Usd.01 (AMC - Free Report) and Caesars Entertainment Inc Common Stock (CZR - Free Report) .
The top 10 holdings account for about 3.62% 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 -8.62% so far this year and is down about -4.16% in the last one year (as of 03/03/2022). In the past 52-week period, it has traded between $88.84 and $110.14.
The ETF has a beta of 1.20 and standard deviation of 28.69% for the trailing three-year period, making it a medium risk choice in the space. With about 1854 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab U.S. SmallCap 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 a great 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 SmallCap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $62.13 billion in assets, iShares Core S&P SmallCap ETF has $71.51 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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.