SCHA and VB Offer Similar Small-Cap ETF Advantages, but Which Is the Better Buy?

Core Insights - The Vanguard Small-Cap ETF (VB) and Schwab U.S. Small-Cap ETF (SCHA) are both designed for diversified access to U.S. small-cap stocks through a passive, index-tracking approach, with subtle differences in cost, performance, and risk influencing investor choice [1] Cost & Size Comparison - VB has an expense ratio of 0.03%, while SCHA has a slightly higher expense ratio of 0.04% [2] - As of February 9, 2026, VB's one-year return is 12.49%, compared to SCHA's 16.27% [2] - VB offers a dividend yield of 1.27%, slightly higher than SCHA's 1.19% [2] - Assets under management (AUM) for VB is $169 billion, significantly larger than SCHA's $20 billion [2] Performance & Risk Comparison - Over five years, VB has a max drawdown of -28.16%, while SCHA has a deeper max drawdown of -30.79% [3] - The growth of $1,000 invested over five years is $1,292 for VB and $1,221 for SCHA [3] Holdings & Sector Focus - SCHA aims to mirror the Dow Jones U.S. Small-Cap Total Stock Market Index, holding 1,730 stocks with a focus on technology, financial services, and industrials [4] - VB tracks the CRSP US Small Cap Index, holding 1,324 stocks, with a focus on industrials, technology, and financial services [5] - Notable holdings for SCHA include Sandisk, Lumentum, and Rocket Companies, while VB's notable holdings are Rocket Lab, Sandisk, and Ciena [4][5] Investor Implications - Both ETFs provide diversified exposure to the small-cap segment, with over 1,000 holdings each, but differ in sector allocation and risk profile [6] - SCHA's focus on technology may contribute to its higher volatility, reflected in a higher beta and deeper max drawdown compared to VB [6] - Despite SCHA's turbulence, it has outperformed VB over the past 12 months, while VB has a slight edge in five-year total returns [7] - VB's larger AUM provides greater liquidity, making it easier for investors to buy and sell larger amounts without affecting the ETF's price [8] - Investors seeking greater tech exposure may prefer SCHA, while those looking for more liquidity may benefit from VB's larger asset base [9]