SCHA vs. SPSM: Which Small-Cap ETF Is the Better Buy?
SCHA's broader portfolio delivered stronger one-year returns, while SPSM offers a higher dividend yield and lower volatility.
Overview
Small-cap investing doesn't have to mean picking individual stocks -- and these two funds, the Schwab U.S. Small-Cap ETF (NYSEMKT:SCHA) and the State Street SPDR Portfolio S&P 600 Small Cap ETF (NYSEMKT:SPSM), offer investors an easy way to get broad exposure to the segment. Both are dirt cheap and built for buy-and-hold investors, but they take noticeably different approaches.
For starters, they track different benchmarks. SPSM follows the S&P SmallCap 600, which requires companies to be profitable before they're added to the index. SCHA tracks the Dow Jones U.S. Small-Cap Total Stock Market Index, a much broader universe that doesn't screen for profitability -- which explains why its portfolio is so much larger.
Details
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Source
Originally published at www.fool.com.