In late 2009, Charles Schwab Investment Management forayed into the exchange traded fund market by unveiling some of the lowest cost, if not the lowest cost index ETFs in various slices of the market including U.S. large, mid, and small-cap equity, U.S. REITs, fixed income, and international and emerging markets equities.
How has the fund sponsor done so far? Today we specifically look at the U.S. large, mid and small-cap equity spaces.
Schwab U.S. Large-Cap ETF (NYSEArca: SCHX) has returned 25.1% since inception compared to iShares S&P 500 (NYSEArca: IVV) and SPDR S&P 500 ETF (NYSEArca: SPY) both returning 22.9%.
SCHX also undercuts both IVV and SPY from an expense ratio standpoint, coming in at 8 basis points (0.08%) versus 9 basis points apiece for IVV and SPY.
In the mid-cap space, Schwab U.S. Mid-Cap ETF (NYSEArca: SCHM) has gained 5.7% since inception, trailing iShares S&P MidCap 400 (NYSEArca: IJH), which is up 5.8% in the same period. SPDR Midcap 400 (NYSEArca: MDY) and Vanguard Midcap ETF (NYSEArca: VO) have both returned 5.6% and 5.2% respectively during this same time frame. SCHM charges 13 basis points, and is the cheapest alternative in the mid-cap space, where expense ratios among peers go up to 25 basis points.
Finally, in small-caps, Schwab U.S. Small-Cap ETF (NYSEArca: SCHA) is the best performer since inception against its peers, up 46.7%. Vanguard Small Cap (NYSEArca: VB) has returned 45.2%, iShares S&P 600 (NYSEArca: IJR) has gained 44.7%, and iShares Russell 2000 (NYSEArca: IWM) has rallied 42.6%. From an expenses standpoint, SCHA charges 13 basis points while the others in this category range all the way up to 28 basis points. Unlike the State Street, iShares, and Vanguard ETFs, Schwab’s are based on Dow Jones Indexes instead of MSCI, S&P, and Russell indexes. From a market capitalization, assets under management standpoint, SCHX has attracted about $619 million in assets, followed by SCHA with $528 million and SCHM with $93 million.
Schwab U.S. Large-Cap ETF
Chart source: StockCharts.com.
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