Should Schwab U.S. Small-Cap ETF (SCHA) Be on Your Investing Radar?
The fund is sponsored by Charles Schwab. It has amassed assets over $17.11 billion, making it one of the largest ETFs attempting to match the Small Cap Blend segment of the US equity market.
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 usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
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 1.58%.
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 18.90% of the portfolio. Industrials and Information Technology round out the top three.
Looking at individual holdings, Duolingo Inc Class A (DUOL) accounts for about 0.56% of total assets, followed by Affirm Holdings Inc Class A (AFRM) and Reddit Inc Class A (RDDT).
The top 10 holdings account for about 3.48% of total assets under management.
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 -3.58% so far this year and is up roughly 6.07% in the last one year (as of 06/09/2025). In the past 52-week period, it has traded between $20.42 and $28.32.
The ETF has a beta of 1.11 and standard deviation of 22.31% for the trailing three-year period, making it a medium risk choice in the space. With about 1718 holdings, it effectively diversifies company-specific risk.
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) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $62.92 billion in assets, iShares Core S&P Small-Cap ETF has $78.18 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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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Schwab U.S. Small-Cap ETF (SCHA): ETF Research Reports
iShares Russell 2000 ETF (IWM): ETF Research Reports
iShares Core S&P Small-Cap ETF (IJR): ETF Research Reports
Affirm Holdings, Inc. (AFRM) : Free Stock Analysis Report
Duolingo, Inc. (DUOL) : Free Stock Analysis Report
Reddit Inc. (RDDT) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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