Schwab (SCHA) vs. iShares (IJR): Which Small Cap ETF Should Investors Buy?

Schwab U.S. Small-Cap ETF has a lower expense ratio of 0.04% compared to iShares Core S&P Small-Cap ETF's 0.06%.

While iShares Core S&P Small-Cap ETF holds 641 stocks, Schwab U.S. Small-Cap ETF provides broader exposure with 1,706 holdings.

Schwab U.S. Small-Cap ETF has delivered a higher 1-year total return of 36.30% but also experienced a deeper maximum drawdown.

Schwab U.S. Small-Cap ETF (NYSEMKT:SCHA) offers lower costs and broader diversification, while iShares Core S&P Small-Cap ETF (NYSEMKT:IJR) provides a more concentrated portfolio with slightly lower historical volatility.

Small-cap stocks can offer significant growth potential but often experience greater price swings than their large-cap counterparts. This comparison compares two popular low-cost options that track different small-cap indexes to help investors determine which best fits their risk profile and diversification needs.

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The one-year return represents total return over the trailing 12 months. Dividend yield is the trailing 12-month distribution yield.

The Schwab fund is the more affordable option with an expense ratio of 0.04%, slightly lower than the 0.06% fee for the iShares fund. Regarding income, IJR offers a marginally higher payout of 1.15% compared to SCHA’s 1.00%.

The Schwab U.S. Small-Cap ETF (SCHA) was launched in 2009 and tracks a much broader set of 1,706 holdings. Its sector exposure tilts toward technology at 23.00%, financial services at 16.00%, and industrials at 16.00%. Its largest positions include Sandisk at 4.98%, Lumentum at 1.33%, and Revolution Medicines at 0.63%. Over the trailing 12 months, it paid $0.34 per share in dividends.