CZA vs SCHM

CZACInvesco Zacks Mid-Cap ETF

SCHMASchwab U.S. Mid-Cap ETF

In short

CZA A stock picker in index clothing: about 100 mid-caps chosen by a Zacks quant screen instead of the whole segment. Running since 2007, and the 0.69% fee is the price of that opinion.

SCHM The forgotten middle of the US market, for three basis points. SCHM has tracked the Dow Jones U.S. Mid-Cap Total Stock Market Index since 2011, holding roughly 500 companies at a fee nobody in the category undercuts.

Stated mandate

CZA The fund seeks to track the Zacks Mid-Cap Core Index by investing at least 90% of its assets in securities included in that index.

SCHM The fund seeks to track, before fees and expenses, the total return of the Dow Jones U.S. Mid-Cap Total Stock Market Index.

Why people hold it

• CZA Rules-based but opinionated. The Zacks Mid-Cap Core Index screens down to roughly 100 names, so the basket genuinely looks different from a cap-weighted mid-cap fund.invesco.com
• The mandate is tight: at least 90% of assets sit in the named index, so this is a quant screen in an index wrapper, not open-ended manager discretion.invesco.com
• Launched in 2007 under Invesco, it has run the same strategy through the financial crisis and every market since. Long track records are rare among rules-based screens.invesco.com
• It stays close to the index it advertises, so what you read in the methodology is broadly what you own.

• SCHM 0.03% a year, 30 cents per $100. That ties VO for the lowest fee in the mid-cap group and runs well below the category's typical charge.schwabassetmanagement.com
• Pure index plumbing: no stock picking, no tilts. The fund has tracked its benchmark closely, which is the whole job description here.
• Roughly 500 mid-sized US companies, so no single name carries the fund. Broad enough to be a one-ticket middle slice.
• A multi-billion-dollar fund trading since 2011 and among the stronger builds in its peer group, with active daily volume and tight handling.

Worth knowing

• CZA Cost is the headline trade-off. At 0.69%, this sits far above plain mid-cap trackers such as VO and SCHM at 0.03%. That gap comes out of returns every year, screen or no screen.
• Thinly traded and modest in size, so bid-ask spreads are a bigger slice of your real cost here than with the giant mid-cap funds.
• About 100 holdings means individual names swing the fund more than in a broad index holding several hundred. Concentration cuts both directions.

• SCHM Mid-caps swing harder than blue chips. This is full, undampened exposure to that middle tier, with nothing built in to soften rough stretches.
• Every provider draws the mid-cap line differently. The Dow Jones index here won't hold the same names as a Russell or Morningstar mid-cap fund, so overlap with what you own varies.
• Distributions land quarterly, and they're a byproduct of the index, not the point. This is a growth-of-capital vehicle, not an income one.

Full CZA profile⁠

Full SCHM profile⁠