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Small Cap ETF (SCHA) Hits New 52-Week High

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For investors seeking momentum, Schwab U.S. Small-Cap ETF (SCHA - Free Report) is probably on radar now. The fund just hit a 52-week high, and is up about 36.4% from its 52-week low price of $43.79/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

SCHA in Focus    

This ETF offers exposure to the small cap segment of the broad U.S. stock market. It holds a large basket of 1,752 stocks with none holding more than 0.35% of assets. From a sector look, the fund is also well diversified with financials, information technology, industrials, consumer discretionary and healthcare making up for the top five sectors. The fund charges investors 6 basis points a year in fees (see: all the Small Cap ETFs here).

Why the Move?

The small cap segment has been an area to watch lately as market sentiments have turned extremely bullish after the election with small caps leading the way. Trump’s massive stimulus policies should benefit small caps more as these are closely tied to the U.S. economy and generate most of their revenues from the domestic market. Further, his proposed renegotiation or termination of the North American Free Trade Agreement and plans of building a Mexico wall would favor small cap stocks in case it results in a trade war or a tariff increase as expected.

More Gains Ahead?

Currently, SCHA has a Zacks ETF Rank of 3 or ‘Hold’ rating with a Medium risk outlook, so it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.

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