Should Schwab U.S. Small-Cap ETF (SCHA) Be on Your Investing Radar?

If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the Schwab U.S. Small-Cap ETF (SCHA), a passively managed exchange traded fund launched on November 3, 2009.

The fund is sponsored by Charles Schwab. It has amassed assets over $23.98 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.

Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 1.03%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector -- about 20.7% of the portfolio. Healthcare and Industrials round out the top three.

Looking at individual holdings, Sandisk Corp (SNDK) accounts for about 4.93% of total assets, followed by Lumentum Holdings Inc (LITE) and Revolution Medicines Inc (RVMD).

The top 10 holdings account for about 9.8% 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 has added roughly 22.78% so far this year and it's up approximately 33.69% in the last one year (as of 08/24/2026). In the past 52-week period, it has traded between $26.49 and $36.13.

The ETF has a beta of 1.10 and standard deviation of 20.38% for the trailing three-year period, making it a medium risk choice in the space. With about 1727 holdings, it effectively diversifies company-specific risk.

Alternatives

Schwab U.S. Small-Cap ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SCHA is an excellent 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 Vanguard Morningstar Small-Cap ETF (VB) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While Vanguard Morningstar Small-Cap ETF has $82.41 billion in assets, iShares Core S&P Small-Cap ETF has $111.03 billion. VB has an expense ratio of 0.03% 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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This article originally published on Zacks Investment Research (zacks.com).

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