Schwab U.S. Small-Cap ETF SCHA is a great core small-cap fund. This is a well-constructed index portfolio that effectively diversifies risk and enjoys a sizable cost advantage over its peers. While the fund takes steps to mitigate transaction costs, small-cap stocks tend to be more expensive to index, owing to their lower trade volume, than larger stocks. They are also more susceptible to mispricing, though the index this fund tracks has been tough to beat. The fund warrants a downgrade to a Morningstar Analyst Rating of Silver from Gold.
Will SCHA outperform in future?
Get our overall rating based on a fundamental assessment of the pillars below.
The Process Pillar is our assessment of how sensible, clearly defined, and repeatable SCHA’s performance objective and investment process is for both security selection and portfolio construction.
The People Pillar is our evaluation of the SCHA management team’s experience and ability. We find that high-quality management teams deliver superior performance relative to their benchmarks and/or peers.
The Parent Pillar is our rating of SCHA’s parent organization’s priorities and whether they’re in line with investors’ interests.