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.
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Full Disclosure: Tom Lydon’s clients own shares of SCHA.