Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the Schwab U.S. Small-Cap ETF (SCHA) is a passively managed exchange traded fund launched on November 3, 2009.
The fund is sponsored by Charles Schwab. It has amassed assets over $24.18 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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
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 0.97%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector -- about 24% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Sandisk Corp (SNDK) accounts for about 2.5% of total assets, followed by Lumentum Holdings Inc (LITE) and Ati Inc (ATI).
The top 10 holdings account for about 7.24% 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 return is roughly 23.7% so far this year and was up about 44.2% in the last one year (as of 06/22/2026). In the past 52-week period, it has traded between $24.87 and $35.19.
The ETF has a beta of 1.10 and standard deviation of 20.12% for the trailing three-year period, making it a medium risk choice in the space. With about 1731 holdings, it effectively diversifies company-specific risk.
Alternatives
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 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) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $82.46 billion in assets, iShares Core S&P Small-Cap ETF has $109.54 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
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
This article originally published on Zacks Investment Research (zacks.com).