What do 'Small-Cap' and 'Mid-Cap' actually mean in these ETF names?

These terms refer to the market capitalisation of the companies held within the funds. Fund A (SCHA) targets small-cap stocks, generally defined as companies with smaller total market values, while Fund B (SCHM) focuses on mid-cap stocks, representing companies with moderate market values. These classifications indicate different segments of the equity market, each with distinct growth potential and risk profiles compared to large-cap or micro-cap investments.

What is the difference between 'Blend' style and pure growth or value investing?

Both funds are described as 'Blend', meaning they hold a mix of companies with different characteristics. A pure growth fund might only hold companies expected to increase earnings rapidly, while a pure value fund might target undervalued stocks. A blend strategy, like that in SCHA and SCHM, attempts to capture opportunities from both sides of the growth-value spectrum, potentially diversifying the stylistic risk within the specific capitalisation segment.

How does market capitalisation influence the risk level of an equity fund?

Generally, smaller companies are considered to carry higher volatility than larger, more established firms. This is because small-cap companies may have fewer resources, less diversified revenue streams, and are more sensitive to economic downturns. While Fund B (SCHM) invests in mid-cap firms which are larger than those in Fund A (SCHA), both are still considered riskier than broad market funds dominated by mega-cap stocks, though they offer different levels of potential growth.

How do the expense ratios of SCHA and SCHM compare?

Both Schwab US Small-Cap ETF (SCHA) and Schwab US Mid-Cap ETF (SCHM) have an identical expense ratio of 0.03%. This low cost is a significant feature for long-term investors as it means less wealth is eroded by fees over time. Because the ratios are the same, an investor cannot distinguish between them on a cost basis alone; decisions must rely on the underlying market exposure rather than fee savings.

How might a 0.03% expense ratio affect my returns over twenty years?

A 0.03% expense ratio is considered very low. Over twenty years, if an investment grows at a steady rate, this fee deducts a tiny fraction from the total accumulated assets compared to higher-cost funds (e.g., 1.00%). However, since both funds have the same 0.03% ratio, the net fee impact on relative performance between SCHA and SCHM is neutral. The key takeaway is that both are low-cost options, preserving more of the gross market return for the investor.

What is the net asset size of each fund and why does it matter?

Fund A (SCHA) has net assets of $25.5 billion, while Fund B (SCHM) has net assets of $17.3 billion. Both funds have substantial assets, which typically supports better liquidity. This means traders can buy or sell shares without significantly impacting the share price. Larger fund sizes can also indicate widespread investor confidence and allow the fund provider to negotiate lower trading costs, contributing to the maintenance of the low 0.03% expense ratio.

When were these funds launched and does age matter for performance?

Fund A (SCHA) was launched on 3 November 2009, while Fund B (SCHM) began on 13 January 2011. Fund A has a longer track record by approximately 14 months. While a longer history allows for more data analysis, the difference is relatively minor in the context of decades-long investing. Both funds are well-established, mature products. Age itself does not guarantee better performance, but it often demonstrates stability in management and adherence to the investment mandate.

What are the top holdings in each fund and how do they differ?

The top ten holdings differ significantly, reflecting their market cap focus. For Fund A (SCHA), the top holding is Sandisk (SNDK) at 5.18%. For Fund B (SCHM), Sandisk is also the top holding but at 4.54%. However, the second holdings differ: Lumentum (LITE) is 1.51% in SCHA, while Bloom Energy (BE) is 1.40% in SCHM. This shows distinct portfolio compositions, though the concentration in SNDK is higher in the small-cap fund.

Do these two funds have any overlapping holdings?

Yes, there is overlap in the top ten holdings. Three specific companies appear in the top lists of both funds: Sandisk (SNDK), Lumentum (LITE), and Rev Medic (RVMD). This overlap indicates that certain companies may qualify for both indices depending on their changing market capitalisation or index construction rules. However, the weights differ; for example, SNDK is 5.18% in SCHA versus 4.54% in SCHM, highlighting the structural differences in how each fund values these stocks.

How do the dividend yields of these funds compare?

Fund A (SCHA) has a reported dividend yield of 1.06%, while Fund B (SCHM) has a yield of 1.26%. This means that, based on recent price and distribution data, the mid-cap fund offers a slightly higher income yield than the small-cap fund. Investors focused on current income might look at these figures, though yields can fluctuate with share prices and future company dividends. Both yields are modest compared to high-dividend specific strategies.

How are dividends handled by these ETFs?

ETFs like SCHA and SCHM typically receive dividends from their underlying portfolio companies. Instead of holding the cash, the fund accumulates these payments and distributes them to shareholders periodically, often quarterly. The reported yields (1.06% for SCHA and 1.26% for SCHM) reflect the recent annual distributions relative to the price. Investors usually have the choice to receive these distributions in cash or to reinvest them automatically to purchase more shares, compounding growth over time.

Are these funds suitable for tax-efficient investing?

Both funds have low expense ratios (0.03%), which helps minimise cost drag. Regarding taxes, ETFs are often structured to be more tax-efficient than mutual funds by allowing in-kind creations and redemptions, which can reduce realised capital gains. While specific tax outcomes depend on individual circumstances and jurisdiction, holding these ETFs for the long term allows any distributions to be managed under general tax rules. The low turnover of index funds also typically helps limit unexpected taxable events.

SCHA vs SCHM

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Schwab US Small-Cap ETF vs Schwab US Mid-Cap ETF. Compare fees, holdings, dividends and market tracking for these index funds to understand their differences. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

SCHA

Metric

SCHM

0.03%

Expense Ratio

0.03%

1.06%

Dividend Yield

1.26%

$25.48B

Net Assets

$17.33B

1,704

Holdings

493

Nov 3, 2009

Inception Date

Jan 13, 2011

–

Index Tracked

–

Small Blend

Fund Category

Mid-Cap Blend

Both funds charge the same annual fee.

Shared Top Holdings

Holding	SCHA	SCHM
SNDKSandisk Corporation	5.18%	4.54%
LITELumentum Holdings Inc.	1.51%	1.32%
RVMDRevolution Medicines, Inc.	0.85%	0.75%

Discover More Comparisons

SCHA vs SCHB

Compare SCHA and SCHB fees, holdings and dividends. Both Schwab ETFs track distinct markets with a 0.03% expense ratio. Review data to inform decisions.

SCHA vs SCHD

Compare SCHA and SCHD fees, dividends, and holdings. SCHA charges 0.03%; SCHD yields 3.11%. Assess tracking methods and expense ratios for each fund.

SCHA vs VOO

Compare SCHA and VOO ETFs. Analyze fees, holdings, dividends, and tracking. SCHA offers small-cap exposure; VOO provides large-cap blend performance.

Investment Analysis

SCHA

Pros

Very low expense ratio of 0.03%.
Large asset base of $25.5 billion aids liquidity.
Long track record since November 2009.

Considerations

Relatively low dividend yield of 1.06%.
Top holding Sandisk represents 5.18% of assets.
Small-cap exposure inherently carries higher volatility.

SCHM

Pros

Competitively low expense ratio of 0.03%.
Substantial $17.3 billion asset size supports trading.
Launched in January 2011 providing a mature history.

Considerations

Modest dividend yield of 1.26%.
Sandisk accounts for 4.54% of fund holdings.
Mid-cap blend may lag in some market cycles.

Related Market Insights

Capital Returns: The Shareholder Yield Play

Explore Capital Returns, a Neme focused on companies rewarding shareholders via buybacks & dividends. Invest in robust firms like Schwab with Nemo's thematic baskets.

Aimee Silverwood | Financial Analyst

25 July 2025

Read Insight

Related Market Insights

Capital Returns: The Shareholder Yield Play

Explore Capital Returns, a Neme focused on companies rewarding shareholders via buybacks & dividends. Invest in robust firms like Schwab with Nemo's thematic baskets.

Aimee Silverwood | Financial Analyst

25 July 2025

Read Insight

About SCHA and SCHM

SCHA (SCHA)

Schwab US Small‑Cap ETF (SCHA) offers broad exposure to US small-capitalisation companies through a low-cost, market‑weighted fund managed by Charles Schwab. It seeks to track a small‑cap index, providing diversified access to hundreds of smaller US-listed firms across sectors. Investors often use SCHA to complement large‑cap holdings, potentially enhancing long‑term growth and diversification, though small caps can be more volatile and sensitive to economic cycles. As an ETF, SCHA trades like a stock on exchanges, making it easy to buy or sell during market hours. It typically has a low expense ratio, but investors should also consider bid‑ask spreads, tracking error, and tax implications. This is general educational information and not personalised advice; returns are not guaranteed and the value of an investment can fall as well as rise. Suitability will depend on an individual’s goals, risk tolerance and investment horizon.

SCHM (SCHM)

The Schwab US Mid-Cap ETF offers investors a cost-effective way to gain exposure to mid-sized US companies. By tracking a broad mid-cap index, it captures a blend of established firms and high-growth potential businesses. With a remarkably low expense ratio of just 0.03%, this fund is designed to minimise costs for long-term investors. It holds approximately 493 stocks, providing diversified exposure across various sectors of the US economy. While it currently lists no active dividend, the fund's structure allows for potential income generation alongside capital appreciation. Mid-cap stocks often serve as a middle ground between the stability of large-cap companies and the volatility of small-cap firms. However, like all equities, values can rise and fall, and returns are not guaranteed. This ETF is suitable for those seeking broad US mid-market exposure without personalised advice.

Which Baskets Do They Appear In?

Capital Returns: The Shareholder Yield Play

Following Charles Schwab's massive $20 billion stock buyback and dividend increase, this theme focuses on other financially robust companies that are similarly rewarding their investors. The strategy is to invest in firms with strong cash flows and a commitment to returning capital to shareholders.

Published: 25 July 2025

Explore Basket

Which Baskets Do They Appear In?

Capital Returns: The Shareholder Yield Play

Published: 25 July 2025

Explore Basket

Buy SCHA or SCHM in Nemo

🆓

Zero Commission

Trade stocks, ETFs, and more with zero commission. Keep more of your returns.

🔒

Trusted & Regulated

Part of Exinity Group 2015, serving over a million customers globally.

💰

6% Interest on Cash

Earn 6% AER on uninvested cash with daily interest payments.

SCHA vs SCHM

Fund Snapshot