Should the Schwab US SmallCap ETF (SCHA) be on your investment radar?
Te Schwab US SmallCap ETF (SCHA) was launched on 03/11/2009 and is a passively managed exchange-traded fund designed to provide broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by Charles Schwab. It has amassed over $ 17.23 billion in assets, making it one of the largest ETFs attempting to match the Small Cap Blend segment of the US stock market.
Why the small cap mix
There is a lot of potential in investing in small cap companies, but with a market cap of less than $ 2 billion, with that high potential comes even higher risk.
Blended ETFs typically hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Cost is a big factor in selecting the right ETF, and cheaper funds can dramatically outperform their more expensive counterparts if all other fundamentals are the same.
This ETF’s annual operating expense is 0.04%, making it one of the cheapest products in the space.
It has a 12 month rolling dividend yield of 0.99%.
Return and risk
SCHA seeks to match the performance of the Dow Jones US Small-Cap Total Stock Market Index before fees and expenses. The Dow Jones US Small-Cap Total Stock Market Index includes the small cap portion of the Dow Jones US Total Stock Market Index currently available to investors in the market.
ETF yield is around 20.08% so far this year and has increased by around 51.17% in the last year (as of 10/29/2021). Over the past 52 weeks, it has traded between $ 69.82 and $ 105.82.
The ETF has a beta of 1.24 and a standard deviation of 28.45% for the three-year period, making it a medium risk choice in the space. With around 1,862 participations, it effectively diversifies the risk specific to the company.
The Schwab US SmallCap ETF holds a Zacks ETF Rank of 2 (Buy), which is based on the expected return of the asset class, expense ratio and momentum, among other factors. For this reason, SCHA is a great option for investors looking for exposure to the Style Box – Small Cap Blend segment of the market. There are other additional ETFs in the space that investors might consider as well.
The iShares Russell 2000 ETF (IWM) and the iShares Core S&P SmallCap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $ 70.74 billion in assets, iShares Core S&P SmallCap ETF has $ 71.59 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Although they are 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 and other ETFs, search for products that match your investment goals, and read articles on the latest developments in the ETF investing world, please visit the Zacks ETF Center.
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ETF Schwab US SmallCap (SCHA): ETF Research Reports
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The Aaron’s Company, Inc. (AAN): Free Inventory Analysis Report
American Assets Trust, Inc. (AAT): Free Stock Analysis Report
IShares Russell 2000 ETF (IWM): ETF Research Reports
IShares Core S&P SmallCap (IJR) ETF: ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.