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Should Schwab U.S. Small-Cap ETF (SCHA) Be on Your Investing Radar?
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The Schwab U.S. Small-Cap ETF (SCHA - Free Report) was launched on 11/03/2009, and is a passively managed exchange traded fund designed to offer 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 $16.50 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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 1.35%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 18.20% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Microstrategy Inc Class A (MSTR - Free Report) accounts for about 0.47% of total assets, followed by Nutanix Inc Class A (NTNX - Free Report) and Elf Beauty Inc (ELF - Free Report) .
The top 10 holdings account for about 3.3% 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 gained about 1.22% so far this year and is up roughly 18.11% in the last one year (as of 05/31/2024). In the past 52-week period, it has traded between $38.13 and $49.24.
The ETF has a beta of 1.17 and standard deviation of 22.18% for the trailing three-year period, making it a medium risk choice in the space. With about 1727 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab U.S. Small-Cap ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, SCHA is a sufficient option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
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 $59.61 billion in assets, iShares Core S&P Small-Cap ETF has $78.55 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?
The Schwab U.S. Small-Cap ETF (SCHA - Free Report) was launched on 11/03/2009, and is a passively managed exchange traded fund designed to offer 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 $16.50 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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 1.35%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 18.20% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Microstrategy Inc Class A (MSTR - Free Report) accounts for about 0.47% of total assets, followed by Nutanix Inc Class A (NTNX - Free Report) and Elf Beauty Inc (ELF - Free Report) .
The top 10 holdings account for about 3.3% 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 gained about 1.22% so far this year and is up roughly 18.11% in the last one year (as of 05/31/2024). In the past 52-week period, it has traded between $38.13 and $49.24.
The ETF has a beta of 1.17 and standard deviation of 22.18% for the trailing three-year period, making it a medium risk choice in the space. With about 1727 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab U.S. Small-Cap ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, SCHA is a sufficient option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
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 $59.61 billion in assets, iShares Core S&P Small-Cap ETF has $78.55 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.