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Should Schwab U.S. SmallCap ETF (SCHA) Be on Your Investing Radar?
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If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the Schwab U.S. SmallCap 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 $15.18 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
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but 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
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 1.30%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 16.80% of the portfolio. Industrials and Information Technology round out the top three.
Looking at individual holdings, Alcoa Corp (AA - Free Report) accounts for about 0.41% of total assets, followed by Zoominfo Technologies Inc Class A (ZI - Free Report) and Builders Firstsource Inc (BLDR - Free Report) .
The top 10 holdings account for about 3.31% 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 -15.02% so far this year and is down about -13.59% in the last one year (as of 05/04/2022). In the past 52-week period, it has traded between $43.08 and $55.07.
The ETF has a beta of 1.18 and standard deviation of 29.10% for the trailing three-year period, making it a medium risk choice in the space. With about 1795 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 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 SmallCap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $55.06 billion in assets, iShares Core S&P SmallCap ETF has $67.22 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. SmallCap ETF (SCHA) Be on Your Investing Radar?
If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the Schwab U.S. SmallCap 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 $15.18 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
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but 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
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 1.30%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 16.80% of the portfolio. Industrials and Information Technology round out the top three.
Looking at individual holdings, Alcoa Corp (AA - Free Report) accounts for about 0.41% of total assets, followed by Zoominfo Technologies Inc Class A (ZI - Free Report) and Builders Firstsource Inc (BLDR - Free Report) .
The top 10 holdings account for about 3.31% 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 -15.02% so far this year and is down about -13.59% in the last one year (as of 05/04/2022). In the past 52-week period, it has traded between $43.08 and $55.07.
The ETF has a beta of 1.18 and standard deviation of 29.10% for the trailing three-year period, making it a medium risk choice in the space. With about 1795 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 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 SmallCap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $55.06 billion in assets, iShares Core S&P SmallCap ETF has $67.22 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.