Yahoo Finance Should Schwab U.S. Mid-Cap ETF (SCHM) Be on Your Investing Radar?
Designed to provide broad exposure to the Mid Cap Blend segment of the US equity market, the Schwab U.S. Mid-Cap ETF (SCHM) is a passively managed exchange traded fund launched on 01/13/2011.
The fund is sponsored by Charles Schwab. It has amassed assets over $11.14 billion, making it one of the larger ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. Thus, companies that fall under this category provide a stable and growth-heavy investment.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.04%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.47%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 21.20% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Dell Technologies Inc Class C (DELL) accounts for about 0.75% of total assets, followed by Vertiv Holdings Class A (VRT) and Deckers Outdoor Corp (DECK).
The top 10 holdings account for about 5.57% of total assets under management.
Performance and Risk
SCHM seeks to match the performance of the Dow Jones U.S. Mid-Cap Total Stock Market Index before fees and expenses. The Dow Jones U.S. Mid-Cap Total Stock Market Index is a float-adjusted market capitalization weighted index. The Index includes the mid-cap portion of the Dow Jones U.S. Total Stock Market Index actually available to investors in the marketplace and includes the components ranked 501-1000 by full market capitalization.
The ETF return is roughly 4.68% so far this year and was up about 18% in the last one year (as of 06/06/2024). In the past 52-week period, it has traded between $63.01 and $81.43.
The ETF has a beta of 1.13 and standard deviation of 19.88% for the trailing three-year period, making it a medium risk choice in the space. With about 499 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab U.S. Mid-Cap ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, SCHM is a good option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Mid-Cap ETF (VO) and the iShares Core S&P Mid-Cap ETF (IJH) track a similar index. While Vanguard Mid-Cap ETF has $63.98 billion in assets, iShares Core S&P Mid-Cap ETF has $83.27 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Schwab U.S. Mid-Cap ETF (SCHM): ETF Research Reports
Dell Technologies Inc. (DELL) : Free Stock Analysis Report
Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
iShares Core S&P Mid-Cap ETF (IJH): ETF Research Reports
Vanguard Mid-Cap ETF (VO): ETF Research Reports
Vertiv Holdings Co. (VRT) : Free Stock Analysis Report
