IJR vs SCHA: Head-to-Head Comparison

Side-by-Side Comparison

Key Differences Between IJR and SCHA

IJR (iShares Core S&P Small-Cap ETF) is a us small-cap fund managed by BlackRock. IJR tracks the S&P SmallCap 600 Index, which screens for profitability before including companies, making it a higher-quality small-cap option. Unlike broader small-cap indexes, the S&P 600 requires positive earnings, filtering out unprofitable speculative companies. This quality screen has historically helped IJR deliver better risk-adjusted returns than many competing small-cap funds.

SCHA (Schwab U.S. Small-Cap ETF) is a u.s. small-cap blend fund managed by Schwab. SCHA provides exposure to roughly 1,750 small-cap U.S. companies that larger index funds typically miss. Small-cap stocks have historically delivered higher long-term returns than large-caps, though with more volatility along the way. Beginners who want to capture the growth potential of smaller American businesses can use SCHA to broaden their portfolio beyond the usual large-cap names.

The most notable differences are in fees (0.06% vs 0.04%), number of holdings (600 vs 1,750), and 5-year returns (9.50% vs 10.50%).

Holdings Overlap Analysis

IJR and SCHA share only 18% of their top holdings. These funds are quite different, making them complementary choices if you want broader market coverage.

Cost Comparison Over Time

If you invest $10,000 and hold for 20 years (assuming 8% annual returns):

Over 20 years, the fee difference amounts to $171 on a $10,000 investment. SCHA saves you more in fees over time.

Which One Should a Beginner Choose?

Choose IJR if: You want quality-conscious investors wanting small-cap exposure without the junkiest stocks, core small-cap allocation in a diversified portfolio, investors who prefer index methodology with built-in quality screening. It's managed by BlackRock with an expense ratio of 0.06%.

Choose SCHA if: You want long-term investors who want exposure to smaller, faster-growing u.s. companies, portfolio diversifiers looking to complement large-cap core holdings, schwab customers seeking low-cost small-cap exposure with no commissions. It's managed by Schwab with an expense ratio of 0.04%.

Can You Own Both IJR and SCHA?

Absolutely! With only 18% overlap, IJR and SCHA complement each other well. A simple portfolio might allocate 60% to one and 40% to the other, or you could pair them with a bond ETF like BND for a complete three-fund portfolio.

Frequently Asked Questions