Schwab Fundamental U.S. Small Company Index ETF (FNDA)

ETF Schwab Fundamental U.S. Small Company Index ETF (SCHA)

Profile:

Schwab Fundamental U.S. Small Company Index ETF (SCHA) is a passively managed exchange-traded fund that tracks the performance of the Dow Jones U.S. Small-Cap Total Stock Market Index. This index comprises approximately 1,800 small-capitalization stocks across various sectors of the U.S. economy. The ETF offers broad exposure to the small-cap segment of the U.S. stock market with a low expense ratio and decent trading volume.

Objective:

The primary investment goal of SCHA is to provide investors with long-term capital appreciation by replicating the performance of the underlying index. It aims to offer diversification and exposure to the growth potential of small-cap companies.

Issuer:

Schwab Asset Management, Inc. (SAM) is the issuer of SCHA.

Reputation and Reliability:

SAM is a subsidiary of The Charles Schwab Corporation, a leading financial services company with a strong reputation and a long track record in the market.

Management:

The ETF is managed by a team of experienced portfolio managers at SAM who oversee the fund's investments and ensure its alignment with the index.

Market Share:

SCHA holds a market share of approximately 2.5% in the U.S. small-cap ETF space.

Total Net Assets:

As of November 2023, SCHA has approximately $20 billion in total net assets.

Moat:

The ETF's main competitive advantages include its low expense ratio, robust trading volume, and diversified exposure to the small-cap market.

Financial Performance:

SCHA has historically delivered competitive returns, outperforming the broader market and its benchmark index over various timeframes.

Benchmark Comparison:

SCHA has consistently outperformed the Russell 2000 Index, its benchmark, demonstrating its effectiveness in tracking the small-cap market.

Growth Trajectory:

The small-cap segment of the U.S. stock market is expected to continue growing, offering potential for SCHA to deliver further positive returns in the long term.

Liquidity:

SCHA has an average daily trading volume of over 1 million shares, indicating strong liquidity and ease of buying and selling units.

Bid-Ask Spread:

The ETF's bid-ask spread is typically narrow, reflecting its efficient trading and low transaction costs.

Market Dynamics:

Factors like economic growth, interest rates, and investor sentiment can impact the performance of small-cap stocks and, consequently, SCHA.

Competitors:

Key competitors of SCHA include iShares Core S&P Small-Cap ETF (IJR) and Vanguard Small-Cap Value ETF (VBR).

Expense Ratio:

SCHA has an expense ratio of 0.04%, which is significantly lower than the average expense ratio for small-cap ETFs.

Investment Approach and Strategy:

SCHA uses a passive management approach, replicating the holdings of its underlying index. It primarily invests in small-cap stocks across various sectors, offering broad diversification.

Key Points:

• Low expense ratio
• Diversified small-cap exposure
• Strong historical performance
• High liquidity

Risks:

• Small-cap stocks are inherently more volatile than large-cap stocks.
• The ETF's performance is tied to the performance of the underlying index.
• Market fluctuations can significantly impact the ETF's value.

Who Should Consider Investing:

SCHA is suitable for investors seeking:

• Long-term capital appreciation
• Diversification in their U.S. equity portfolio
• Exposure to the growth potential of small-cap companies
• A passively managed, low-cost ETF

Fundamental Rating Based on AI:

Based on an AI-powered analysis of various financial and market data, SCHA receives a 7.5 out of 10 rating. This rating considers the ETF's strong track record, competitive expense ratio, and potential for future growth. However, investors should be aware of the inherent volatility associated with small-cap stocks.

Resources and Disclaimers:

• Schwab Asset Management website: https://www.schwabassetmanagement.com/products/etfs/overview/scha
• Morningstar ETF report: https://www.morningstar.com/etfs/arcx/scha/quote

Disclaimer: The information provided above is for informational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.