SCHA and VB Offer Similar Small-Cap ETF Advantages, but Which Is the Better Buy?
Explore how subtle differences in cost, sector focus, and holdings could influence your small-cap ETF strategy.
The Vanguard Small-Cap ETF (VB +0.42%) and the Schwab U.S. Small-Cap ETF (SCHA +0.29%) are both designed for investors seeking diversified access to U.S. small-cap stocks through a passive, index-tracking approach.
While they are similar in philosophy, this comparison focuses on subtle differences in cost, performance, and risk to help investors decide which might be a better fit.
Snapshot (cost & size)
| Metric | VB | SCHA |
|---|---|---|
| Issuer | Vanguard | Schwab |
| Expense ratio | 0.03% | 0.04% |
| 1-yr return (as of Feb. 9, 2026) | 12.49% | 16.27% |
| Dividend yield | 1.27% | 1.19% |
| AUM | $169 billion | $20 billion |
| Beta (5Y monthly) | 1.23 | 1.29 |
Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.
VB is marginally more affordable on fees, and it also offers a slightly higher dividend yield. The difference in expense and yield is minimal, but cost-conscious investors may still appreciate VB’s edge.
Performance & risk comparison
| Metric | VB | SCHA |
|---|---|---|
| Max drawdown (5 y) | -28.16% | -30.79% |
| Growth of $1,000 over 5 years | $1,292 | $1,221 |
What’s inside
SCHA aims to mirror the Dow Jones U.S. Small-Cap Total Stock Market Index. It holds 1,730 stocks, and its top sectors are technology, financial services, and industrials, in that order. Its largest positions include Sandisk, Lumentum, and Rocket Companies. The fund has been operating for over 16 years, providing a long track record for investors to evaluate.
By comparison, VB tracks the CRSP US Small Cap Index and holds 1,324 stocks, with its largest weights in industrials, technology, and financial services. Notable holdings are Rocket Lab, Sandisk, and Ciena. Neither fund introduces leverage, currency hedging, or other structural quirks, keeping them straightforward for core small-cap exposure.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Both VB and SCHA provide diversified exposure to the small-cap segment, with over 1,000 holdings each. Where they differ primarily comes down to sector allocation and risk profile.
While VB is most focused on the industrials sector, SCHA tilts toward technology. That tech focus may be at least partly why SCHA has experienced more volatility, with a higher beta and slightly deeper max drawdown.
Despite its turbulence, though, SCHA has also outperformed VB over 12 months. VB has the edge in five-year total returns, but the difference is marginal.
Another difference between the two is assets under management (AUM). VB is significantly larger in this aspect, providing greater liquidity. While everyday investors may not need significant liquidity, it can make it easier to buy and sell larger amounts without affecting the ETF’s price.
These two ETFs are similar in most meaningful ways, with nearly identical expense ratios, five-year performance, and dividend yields. Investors looking for slightly greater tech exposure may prefer SCHA, while those seeking more liquidity may benefit from VB’s massive asset base.
