Small-Cap Total Stock Market Index, which broadly tracks the smallest 1,750 of the largest 2,500 public companies in the United States. This Schwab ETF tracks the Dow Jones U.S. Schwab US Small-Cap ETFĪ relatively new entrant to ETFs, Charles Schwab offers products that are quickly grabbing attention for their competitive expense ratios.
Carrying an annual expense ratio of just 0.08%, it has earned its place as a contender as a top small-cap ETF, though investors should be cognizant of its higher-than-average exposure to mid-cap stocks. An allocation that favors some of the biggest small caps gives it a one-, three-, five- and 10-year record of beating the Russell 2000 index. The fund is no slouch when it comes to performance, either. Notice in the following chart the differences in market-cap allocation between this fund and the others on the list. The result is a fund that includes just under 1,500 holdings, with a bias toward mid-cap stocks because of its market-cap weighting and the fact that it purposefully excludes the smallest 2% of the market. Small Cap Index, which seeks to invest in stocks that are smaller than the largest 85% of the market and larger than the bottom 2% of the market. The Vanguard Small-Cap ETF tracks the CRSP U.S. Vanguard funds frequently earn a top spot in any list of the best ETFs because of their low costs, and this fund is no different. There isn't much more to say about this fund, which gives you broad diversification across the leading index for small-cap stocks at a tiny price tag. Inexpensive to hold, with an expense ratio of 0.20% of assets annually, the fund is a great choice for long-term investors. The following chart provides a breakdown of its exposure to holdings by market cap.
The fund is naturally tilted toward small- and micro-cap stocks, which together compromise about 97% of the fund's assets.