The State Street SPDR Portfolio S&P 600 Small Cap ETF (SPSM 1.25%) and the Schwab U.S. Small-Cap ETF (SCHA 1.73%) aim to provide diversified exposure to U.S. small-cap stocks, but they track different indexes and use distinct methodologies. The two ETFs differ most in holdings, sector emphasis, and recent performance, with SCHA offering broader diversification and a stronger one-year return, while SPSM maintains a slightly lower expense ratio and higher yield.
This comparison explores how their portfolio makeup, costs, and recent risk-return profiles may appeal to investors seeking small-cap equity exposure.
Snapshot (cost & size)
| Metric | SPSM | SCHA |
|---|---|---|
| Issuer | SPDR | Schwab |
| Expense ratio | 0.03% | 0.04% |
| 1-yr total return (as of 2026-02-20) | 18.4% | 22.3% |
| Dividend yield | 1.5% | 1.2% |
| Beta | 1.19 | 1.00 |
| AUM | $14.8 billion | $20.8 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.
SPSM edges out SCHA marginally on cost (expense ratio) and yield, offering a slightly higher payout for income-focused investors.
Performance & risk comparison
| Metric | SPSM | SCHA |
|---|---|---|
| Max drawdown (5 y) | (27.94%) | (30.79%) |
| Growth of $1,000 over 5 years | $1,244 | $1,223 |
What's inside
SCHA tracks a broad small-cap index, holding 1,724 stocks and spreading sector weights across financial services (17.9%), industrials (17.2%), and healthcare (15.8%). Its largest positions include Sandisk Corp (SNDK 5.72%), Lumentum Holdings Inc (LITE 5.68%), and ATI Inc (ATI 6.20%), with no single stock dominating. Sandisk is the largest holding at 2%. With a 16-year history and over $20 billion in assets under management (AUM), SCHA emphasizes diversification and liquidity for investors seeking comprehensive small-cap exposure.
In comparison, SPSM covers 607 stocks, with sector tilts toward industrials (18.1%), financial services (18%), and consumer discretionary (14%). Its top holdings are Solstice Adv Materials Inc (SOLS 1.92%), Moog Inc (MOGA 2.44%), and InterDigital Inc (IDCC 0.29%), each representing less than 1% of the portfolio. SPSM’s approach is more concentrated, which may result in slightly different risk and return dynamics versus SCHA’s broader reach.
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What this means for investors
Small-cap stocks offer high return potential but also carry risks and can be volatile. The key to success in small-cap investing, therefore, often boils down to an investor’s patience and appetite for risk.
Because analyzing, picking, and investing in individual small-cap stocks is not for everyone, the State Street SPDR Portfolio S&P 600 Small Cap ETF and the Schwab U.S. Small-Cap ETF are two of the most elite, low-cost ETFs to invest in small-cap stocks. The number of their holdings, however, can make a big difference.
SCHA Total Return Level data by YCharts
SCHA tracks the Dow Jones U.S. Small-Cap Total Stock Market Index, which comprises over 1,700 stocks and offers the broadest possible exposure to small-cap stocks. SPSM, comparatively, tracks the S&P SmallCap 600 Index and is more concentrated, with nearly one-third as many holdings as SCHA.
SCHA may appeal to investors with a high appetite for risk because of its large portfolio. Over the past one and three years, this ETF has also outperformed SPSM.
