ETF Spotlight: Schwab U.S. Small-Cap (SCHA) | ETF Trends

ETF Spotlight on Schwab U.S. Small-Cap (NYSEArca: SCHA), part of  a weekly series.

Assets: $230 million

Objective: Tracks the Dow Jones U.S. Small Cap Total Stock Market Index; it includes components number 751-2,500 of the Dow Jones U.S. Total Stock Market Index.

Holdings: Holds 1,761 securities, including Liberty Media, Continental Airlines and Del Monte Foods.

What You Should Know

  • The top sector in SCHA is financials; information technology, industrials and consumer discretionary also make up a significant portion of the weighting
  • SCHA has a 0.13% expense ratio and it can be traded commission-free on Schwab’s platform
  • The ETF launched nearly a year ago, on Nov. 3, 2009

The Latest News

  • SCHA is handily outperforming the market year-to-date, up 13.1%; the S&P 500 is up 4.9%
  • Given the size of small-caps, doing research can be a time-consuming challenge. But these days, ETF providers have carefully built indexes of high-quality corporations while you, in turn, can own a universe of small-caps in one easy trade.
  • Smaller companies can easily adapt and make fast and effective decisions as compared to their larger, more bulky counterparts.
  • One risk in small-cap investing is that small companies often operate within a specialized or target business area. Because of their less diverse nature, these small companies are more sensitive to economic uncertainty, translating into more volatility.

For full disclosure, Tom Lydon’s clients own shares of SCHA.

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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.