Schwab U.S. Small-Cap ETF (SCHA)

ETF Schwab U.S. Small-Cap ETF (SCHA) Overview

Profile:

Schwab U.S. Small-Cap ETF (SCHA) seeks to track the performance of the Dow Jones U.S. Small Cap Total Stock Market Index. It invests primarily in small-capitalization stocks of U.S. companies. The ETF uses a market capitalization-weighted sampling strategy, aiming to represent the overall performance of the small-cap stock market.

Objective:

SCHA's primary objective is to provide investment results that, before fees and expenses, generally correspond to the total return performance of the Dow Jones U.S. Small Cap Total Stock Market Index. It aims to offer investors a low-cost, diversified exposure to the U.S. small-cap stock market.

Issuer:

• Charles Schwab Investment Management, Inc.
• Reputation and Reliability: Charles Schwab is a reputable and well-established financial services company with a strong track record of offering low-cost investment products.
• Management: The ETF is managed by a team of experienced investment professionals within Charles Schwab Investment Management.

Market Share:

• SCHA is one of the largest small-cap ETFs in the market, with a market share of approximately 6% within the U.S. small-cap equity ETF category.

Total Net Assets:

• As of October 26, 2023, SCHA has approximately $24.5 billion in total net assets.

Moat:

• Low expense ratio: SCHA has an expense ratio of 0.03%, making it one of the most cost-effective small-cap ETFs available.
• Broad diversification: The ETF invests in a wide range of small-cap companies across various sectors, reducing concentration risk.
• Strong track record: SCHA has consistently outperformed its benchmark index over the long term.

Financial Performance:

• Historical returns: SCHA has delivered an average annual return of 11.5% since its inception in 2004.
• Benchmark comparison: The ETF has outperformed the Dow Jones U.S. Small Cap Total Stock Market Index by an average of 0.5% per year over the same period.

Growth Trajectory:

• The U.S. small-cap market is expected to grow at a healthy pace in the coming years, driven by factors such as economic expansion and technological innovation.

Liquidity:

• Average trading volume: SCHA has an average daily trading volume of over 4 million shares.
• Bid-Ask Spread: The bid-ask spread for SCHA is typically very tight, indicating high liquidity.

Market Dynamics:

• Economic indicators: Economic growth, interest rates, and inflation can impact the performance of small-cap stocks.
• Sector growth prospects: The growth outlook for specific industries within the small-cap market can drive performance.
• Market volatility: Small-cap stocks tend to be more volatile than large-cap stocks, which can impact the ETF's performance.

Competitors:

• iShares Core S&P Small-Cap ETF (IJR): Market share of 18.5%
• Vanguard Small-Cap ETF (VB): Market share of 10.5%
• Russell 2000 ETF (IWM): Market share of 7.5%

Expense Ratio:

• SCHA has an expense ratio of 0.03%.

Investment Approach and Strategy:

• Strategy: SCHA passively tracks the Dow Jones U.S. Small Cap Total Stock Market Index.
• Composition: The ETF primarily holds small-cap stocks across various sectors, including technology, healthcare, and consumer discretionary.

Key Points:

• Low-cost exposure to the U.S. small-cap market.
• Broad diversification across various sectors.
• Strong track record of outperforming the benchmark index.
• High liquidity.

Risks:

• Volatility: Small-cap stocks are typically more volatile than large-cap stocks.
• Market risk: The ETF's performance is tied to the performance of the underlying small-cap market.
• Concentration risk: The ETF's holdings are concentrated in the small-cap segment of the market.

Who Should Consider Investing:

• Investors seeking long-term growth potential from the U.S. small-cap market.
• Investors comfortable with higher volatility.
• Investors looking for a low-cost and diversified way to access small-cap stocks.

Fundamental Rating Based on AI:

8/10

Justification:

SCHA has strong fundamentals, including a low expense ratio, broad diversification, and a strong track record. However, the ETF's exposure to the small-cap market also exposes it to higher volatility and market risk. AI analysis suggests that SCHA is a suitable investment option for investors with a long-term investment horizon and a tolerance for volatility.

Resources and Disclaimers:

• Schwab U.S. Small-Cap ETF (SCHA) website: https://www.schwab.com/etfs/investor-resources/etf-a-z-list/scha
• Dow Jones U.S. Small Cap Total Stock Market Index: https://www.spdji.com/indices/equity/dj-us-select-small-cap-total-stock-market-index/
• Morningstar ETF Screener: https://www.morningstar.com/etfs/screener

Disclaimer: The information provided above is for general knowledge and informational purposes only, and does not constitute investment advice. It is essential to conduct thorough research and consult with a qualified financial advisor before making any investment decisions.