This ETF Targets an Overlooked Segment of the Market
Large- and small-cap companies are only part of the equation.
Diversification is one of the most powerful tools an investor has to manage risk. Yet, when it comes to their U.S. equity allocations, investors are often underexposed to mid-cap stocks. Low-cost indexing is a powerful way for investors to gain access to this segment of the market, and Schwab U.S. Mid-Cap ETF (SCHM) is an outstanding fund in this asset class. As one of the cheapest and most broadly diversified market-cap-weighted funds in the category, it earns a Morningstar Analyst Rating of Gold.
This fund tracks the Dow Jones U.S. Mid Cap Total Stock Market Index, which offers broad, market-cap-weighted exposure to U.S. mid-cap stocks. The resulting portfolio accurately represents the composition of the U.S. mid-cap market segment. Its sector exposures are similar to the mid-cap blend Morningstar Category average, as is its market-cap orientation.
Venkata Sai Uppaluri does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.