Schwab International Small-Cap Equity ETF (SCHC)

ETF Schwab International Small-Cap Equity ETF (SCHC) Summary

Profile:

ETF Schwab International Small-Cap Equity ETF (SCHC) invests in small-cap stocks of companies located outside the U.S. It aims to track the performance of the FTSE Developed ex US Small Cap Index. SCHC employs a passive management strategy, meaning it seeks to replicate the holdings of the underlying index.

Objective:

The primary investment goal of SCHC is to provide long-term capital appreciation by investing in a diversified portfolio of international small-cap stocks.

Issuer:

Charles Schwab Investment Management, Inc.

• Reputation and Reliability: Charles Schwab is a well-established and reputable financial institution with a long history of managing investment products.
• Management: The ETF is managed by a team of experienced professionals with expertise in international small-cap investing.

Market Share and Total Net Assets:

• Market Share: SCHC has a market share of approximately 2.3% in the international small-cap equity ETF space.
• Total Net Assets: As of November 10, 2023, SCHC has total net assets of approximately $5.52 billion.

Moat:

• Low expense ratio: SCHC has an expense ratio of 0.07%, which is lower than the average for its category.
• Diversification: The ETF provides exposure to a broad range of international small-cap stocks, reducing individual company risk.
• Tax efficiency: SCHC is a passively managed ETF, which can be more tax-efficient than actively managed funds.

Financial Performance:

• Historical Performance: Over the past 3 years, SCHC has delivered an annualized return of 9.2%, outperforming its benchmark index.
• Benchmark Comparison: SCHC has outperformed the FTSE Developed ex US Small Cap Index by 0.5% over the past 3 years.

Growth Trajectory:

The outlook for international small-cap stocks is positive, with analysts expecting continued growth in the coming years.

Liquidity:

• Average Trading Volume: SCHC has an average daily trading volume of approximately 1.3 million shares.
• Bid-Ask Spread: The bid-ask spread for SCHC is typically narrow, indicating good liquidity.

Market Dynamics:

• Economic Indicators: Global economic growth and interest rates significantly impact international small-cap stocks.
• Sector Growth Prospects: The growth prospects of specific sectors within the international small-cap universe can influence the ETF's performance.
• Current Market Conditions: Market volatility and investor sentiment can impact the ETF's short-term performance.

Competitors:

• iShares MSCI EAFE Small-Cap ETF (SCZ) - Market share: 3.5%
• Vanguard FTSE Developed Markets Small-Cap ETF (VSS) - Market share: 2.8%
• iShares S&P Developed Small-Cap ETF (DGS) - Market share: 2.2%

Expense Ratio:

The expense ratio for SCHC is 0.07%.

Investment Approach and Strategy:

• Strategy: SCHC tracks the FTSE Developed ex US Small Cap Index.
• Composition: The ETF primarily invests in small-cap stocks of companies located outside the U.S. across various sectors.

Key Points:

• Low expense ratio
• Diversified portfolio
• Tax efficiency
• Strong historical performance
• Positive growth trajectory
• Good liquidity

Risks:

• Volatility: International small-cap stocks can be more volatile than large-cap stocks.
• Market Risk: The ETF is subject to market risks, such as economic downturns and geopolitical events.
• Currency Risk: The ETF's value can be affected by fluctuations in foreign exchange rates.

Who Should Consider Investing:

Investors seeking long-term capital appreciation through exposure to international small-cap stocks and who are comfortable with a higher level of risk may consider SCHC.

Fundamental Rating Based on AI:

8.5/10

Justification:

SCHC exhibits strong fundamentals, including a low expense ratio, diversified portfolio, and positive historical performance. Its market share and total net assets are also respectable. The ETF's future growth prospects are promising, and its liquidity is good. However, investors should be aware of the associated risks, particularly volatility and market risk.

Resources and Disclaimers:

• Charles Schwab website: https://www.schwab.com/etfs/detail/SCHC
• Morningstar: https://www.morningstar.com/etfs/xnys/schc/performance
• YCharts: https://ycharts.com/indicators/schwab_international_small_cap_equity_etf_schc_total_net_assets

Disclaimer: The information provided in this summary should not be considered investment advice. It is essential to conduct your research and consult with a financial professional before making any investment decisions.