Vanguard Small-Cap ETF (VB +0.60%) provides a cost-efficient entry to small-cap stocks with high liquidity, while Schwab U.S. Small-Cap ETF (SCHA +0.51%) offers broader diversification and has delivered higher recent total returns.
Small-cap stocks can offer significant growth potential for investors willing to endure higher volatility than the broader market typically exhibits. The Vanguard fund and the Schwab ETF represent two of the most popular low-cost options for gaining this exposure. While both target smaller companies, they utilize different underlying indices that result in varying risk profiles, sector concentrations, and total stock counts.
Snapshot (cost & size)
| Metric | VB | SCHA |
|---|---|---|
| Issuer | Vanguard | Schwab |
| Expense ratio | 0.03% | 0.04% |
| 1-yr return (as of Apr. 27, 2026) | 33.90% | 44.10% |
| Dividend yield | 1.20% | 1.10% |
| Beta | 1.06 | 1.10 |
| Assets under management (AUM) | $164.6 billion | $22.0 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Cost remains a primary consideration for long-term index investors, and the Vanguard fund is slightly more affordable with its 0.03% expense ratio compared to 0.04% for the Schwab ETF. Both funds offer modest income components, though the Vanguard fund provided a slightly higher payout over the last year with its 1.20% dividend yield compared to 1.10% for the Schwab fund.
NYSEMKT: VB
Key Data Points
Performance & risk comparison
| Metric | VB | SCHA |
|---|---|---|
| Max drawdown (5 yr) | (28.20%) | (30.80%) |
| Growth of $1,000 over 5 years (total return) | $1,353 | $1,334 |
NYSEMKT: SCHA
Key Data Points
What's inside
Schwab U.S. Small-Cap ETF (SCHA +0.51%) seeks to mirror the total return of the Dow Jones U.S. Small-Cap Total Stock Market Index. Its portfolio weights are currently led by technology (18.00%), financial services (16.00%), and industrials (16.00%). Its largest individual positions include Sandisk (SNDK 1.98%) at 3.23%, Lumentum (LITE +4.16%) at 1.39%, and Revolution Medicines (RVMD +5.53%) at 0.59%. This fund, which holds 1,728 stocks and was launched in 2009, has a trailing-12-month dividend of $0.34 per share.
Vanguard Small-Cap ETF (VB +0.60%) tracks the CRSP US Small Cap Index through a passively managed, full-replication approach that focuses on a diversified group of small companies. The portfolio leans into industrials (20.00%), technology (16.00%), and financial services (13.00%). Its largest individual positions include EMCOR (EME +2.16%) at 0.45%, NRG Energy (NRG 0.17%) at 0.42%, and Atmos Energy (ATO 0.19%) at 0.42%. The Vanguard fund launched in 2004, manages a total of 1,357 holdings, and paid $3.50 per share over the trailing 12 months.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Small-cap stocks occupy a specific and important role in a long-term portfolio. They offer exposure to companies too small for the S&P 500 -- businesses with more room to grow, more sensitivity to the domestic economy, and more volatility than their large-cap counterparts. Over long time horizons, small caps have historically rewarded patient investors, though the ride is rarely smooth.
VB and SCHA are two of the most cost-efficient ways to access that universe, and they are remarkably similar. Both charge essentially nothing in annual fees. It’s a difference so small it amounts to pennies per year on a typical investment. Both hold well over 1,000 small-cap stocks with no profitability screen, no quality filter, and no single holding carrying meaningful weight. Both track the broad small-cap market without any tilt toward growth or value.
The most meaningful difference between them is scale. VB commands significantly more assets, giving it deeper liquidity and a longer track record. For most long-term investors, the practical choice comes down to which brokerage they use. Vanguard investors will naturally reach for VB, Schwab investors for SCHA.
