“This Schwab ETF follows the Dow Jones U.S. Small Cap Total Stock Market Index and offers investors broad-based exposure to the small-cap universe with a roster of almost 1,760 stocks,” according to InvestorPlace. “Technology and financial services stocks both account for over 15% of this Schwab ETF’s weight. The weighted average market value of SCHA’s holdings is over $2.5 billion, indicating this ETF’s roster is comprised mostly of bigger small caps.”
Small-caps are also focused on the domestic economy and have less direct exposure to global geopolitical uncertainty and currency risks, as opposed to large-cap companies that have an international footprint, which may be affected by overseas risks and a strengthening U.S. dollar.
As the broad equities market pushes toward new highs, riskier assets like small-caps have been able to rally back much quicker. When the economy is doing well and the markets rally, we see sentiment for more nimble smaller companies improve and outperform those of their more languorous, larger peers.
For more information on the small-cap segment, visit our small-cap category.