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 $11.28 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, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. These types of companies, then, have a good balance of stability and growth potential.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 1.42%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 20.20% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Robinhood Markets Inc Class A (HOOD) accounts for about 0.87% of total assets, followed by Eqt Corp (EQT) and Texas Pacific Land Corp (TPL).
The top 10 holdings account for about 6.19% 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 has lost about -1.02% so far this year and it's up approximately 6.49% in the last one year (as of 06/20/2025). In the past 52-week period, it has traded between $22.92 and $30.08.
The ETF has a beta of 1.06 and standard deviation of 19.50% 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 $80.58 billion in assets, iShares Core S&P Mid-Cap ETF has $92.75 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
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 EQT Corporation (EQT): Free Stock Analysis Report iShares Core S&P Mid-Cap ETF (IJH): ETF Research Reports Vanguard Mid-Cap ETF (VO): ETF Research Reports Texas Pacific Land Corporation (TPL): Free Stock Analysis Report Robinhood Markets, Inc. (HOOD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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