Schwab International Small-Cap Equity ETF

Schwab International Small-Cap Equity ETF (SCHC) is an index fund that tracks the FTSE Developed Small Cap ex US Liquid Index, which covers smaller companies in developed countries outside the US. It held 2,181 stocks as of August 31, 2026. Its 0.08% expense ratio is tied with Vanguard's VSS for the lowest among similar funds and is well below their 0.34% average. Its holdings are spread very thin, and it does not hedge currencies.

• Over the year to Oct 27, 2026, SCHC returned +9.3%, 4th of 5 among similar funds.
• Its 5-year annualized return was +5.6% and its 10-year +8.0%.
• In the 2020 COVID crash it fell 39% and regained its old high 6.7 months after the low.
• Its worst full calendar year was 2022 (-21.7%); its best was 2025 (+37.5%).
• The deepest fall in its price history was 44% (Jan 26, 2018 to Mar 23, 2020), recovered by Dec 4, 2020.

As of Aug 31, 2026, the fund held 2,181 securities; the ten largest made up 3.46% of assets. It also reported 3.57% in a money-market fund, most likely cash collateral from lending out shares rather than uninvested money.

• Over the three months to Aug 31, 2026, investors added a net $103.2M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -5.67%, +0.85%, +6.33%.

SCHC aims to match the total return of the FTSE Developed Small Cap ex US Liquid Index, before fees. FTSE treats roughly the bottom 10% of eligible companies in developed markets outside the US as small caps. Each one also needs a free float of at least $150 million, meaning shares that are available for the public to trade. As of August 31, 2025, the index had 2,118 stocks in 25 countries. The fund must keep at least 90% of its net assets in index stocks. These can include depositary receipts, which are certificates that represent foreign shares.

Schwab doesn't buy every stock in the index. Instead it uses sampling: it builds a group of stocks expected to behave like the whole index, based on country weights, company size, industry and risk. Up to 10% of assets can go elsewhere, for example into stocks expected to join the index, other funds, or futures. Futures are contracts that let the fund keep spare cash invested in the market. Turnover was 16%, which suggests modest trading.

The fund does not hedge currencies. That means changes in the yen, the Canadian dollar and the pound pass straight through to US holders. As of August 31, 2026, Japan made up 20.4% of assets, Canada 14.9% and the UK 10.0%. The fund also lends out its securities to earn extra income. Much of its 3.57% cash position is likely collateral from that lending.

• SCHC charges 0.08% a year, versus an average of 0.34% for the similar funds below (1st of 5, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $8 in the first year and $103 over 10 years (assuming a 5% annual return).

It adds thousands of smaller non-US companies that a US-focused portfolio may barely own, at a very low cost.

SCHC adds small companies from Japan, Canada, the UK and other developed markets. In the SEC's standard example, it costs $8 in the first year on $10,000. The ride has been bumpy. The fund fell 39% in the 2020 COVID crash and recovered by October 2020. In the 2022 bear market it dropped 33.8% and took 30.7 months, until May 2025, to get back. Its worst calendar year was 2022, with a loss of 21.9%. Its deepest drop was 44%, from January 2018 to March 2020. Anyone who had to sell shares for spending during stretches like these would have locked in losses. The yield over the past 12 months was 3.46% as of October 27, 2026. It pays twice a year, so the income arrives in lumps. The fund launched in 2010, so it has no record from 2008. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.