Small-Cap ETF Showdown: Schwab's SCHA vs. iShares' IJR

Robert Izquierdo, The Motley Fool

Mon, May 11, 2026 astatine 10:33 AM CDT 5 min read

The Schwab U.S. Small-Cap ETF (NYSEMKT:SCHA) offers little costs and broader marketplace coverage, portion the iShares Core S&P Small-Cap ETF (NYSEMKT:IJR) provides a much concentrated portfolio with higher liquidity.

Both funds service arsenic low-cost gateways to the smallest corners of the home equity market. While they stock akin assemblage exposures, the superior quality lies successful their scale strategies.

The Schwab money casts a wide nett crossed astir the full small-cap universe, portion the iShares money focuses connected a much selective acceptable of companies that indispensable conscionable S&P's circumstantial fiscal viability standards. This favoritism affects however each portfolio reacts to marketplace cycles.

Snapshot (cost & size)

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months. Dividend output is the trailing-12-month organisation yield.

The Schwab money remains 1 of the astir affordable options successful the class with a 0.04% disbursal ratio, which minimizes the resistance connected semipermanent returns. Although the iShares money costs somewhat much astatine 0.06%, it whitethorn entreaty to income-focused investors due to the fact that it presently provides a higher trailing-12-month dividend payout compared to its Schwab counterpart.

Performance & hazard examination

What's wrong

The iShares Core S&P Small-Cap ETF tracks a much selective scale of 640 holdings, focusing connected companies that indispensable conscionable circumstantial marketplace capitalization and profitability criteria. This absorption connected "quality" successful the small-cap abstraction is reflected successful its assemblage exposure, which is balanced betwixt fiscal services astatine 16%, industrials astatine 16%, and exertion astatine 15%. Its largest positions see Viavi Solutions (NASDAQ:VIAV) astatine 0.74%, Sanmina (NASDAQ:SANM) astatine 0.71%, and Formfactor (NASDAQ:FORM) astatine 0.66%. The money was launched successful 2000 and has paid $1.60 per stock successful dividends implicit the trailing 12 months.

In contrast, the Schwab U.S. Small-Cap ETF offers overmuch broader diversification done 1,721 holdings, capturing a wider portion of the full market. Its assemblage tilts favour exertion astatine 18%, followed by fiscal services and industrials astatine 16% each. Its apical holdings see Sandisk (NASDAQ:SNDK) astatine 4.08%, Lumentum (NASDAQ:LITE) astatine 1.53%, and Revolution Medicines (NASDAQ:RVMD) astatine 0.64%. The Schwab money was launched successful 2009 and has a trailing-12-month dividend of $0.34 per share. By including a larger fig of holdings, it provides vulnerability to much micro-cap names that the much selective iShares money mightiness exclude.