The Schwab U.S. REIT ETF (SCHH) is an exchange-traded fund (ETF) that provides investors with exposure to U.S. real estate investment trusts (REITs). It is managed by Schwab Asset Management and aims to track the performance of the Dow Jones Equity All REIT Capped Index, which includes publicly traded equity REITs in the United States.
As of February 20, 2025, SCHH is trading at $21.56 per share, with an intraday high of $21.64 and a low of $21.47. The fund’s expense ratio is 0.07%, making it a cost-effective option for investors seeking exposure to the U.S. real estate sector.
SCHH offers investors a diversified portfolio of U.S. equity REITs, providing potential tax efficiency and serving as a core or complementary holding in a diversified investment portfolio.
Key Details:
- Ticker Symbol: SCHH
- Expense Ratio: 0.07% (low-cost compared to similar ETFs)
- Holdings: U.S. equity REITs (excludes mortgage and hybrid REITs)
- Index Tracked: Dow Jones Equity All REIT Capped Index
- Trading Exchange: NYSE Arca
- Dividend Yield: Varies based on REIT performance (historically provides income potential)
- Investment Objective: Provides broad exposure to U.S. real estate sector through REITs, allowing investors to benefit from property appreciation and dividend income.
Why Invest in SCHH?
- Diversified Real Estate Exposure: Invests in multiple U.S. REITs across different sectors such as commercial properties, residential buildings, and industrial real estate.
- Low Expense Ratio: At 0.07%, SCHH is one of the most cost-effective REIT ETFs available.
- Potential for Dividends & Growth: REITs are required to distribute at least 90% of taxable income as dividends, making this ETF attractive for income-focused investors.
- Liquidity & Accessibility: Traded on the NYSE Arca, making it easy to buy and sell like a stock.
Who Should Consider Investing?
- Investors seeking diversified exposure to U.S. real estate.
- Those looking for potential dividend income from REIT distributions.
- Long-term investors wanting real estate exposure without directly owning property.
Is Schwab U.S. REIT ETF Good Investment?
Whether the Schwab U.S. REIT ETF (SCHH) is a good investment depends on your financial goals, risk tolerance, and market outlook. Here’s an analysis of its pros and cons to help you decide:
Pros of Investing in Schwab U.S. REIT ETF
1) Diversified Real Estate Exposure
- SCHH provides access to a wide range of U.S. equity REITs, reducing the risk of investing in a single property or REIT.
2) Low Expense Ratio (0.07%)
- One of the cheapest REIT ETFs, making it cost-effective compared to other funds in the sector.
3) Potential for Dividend Income
- REITs must distribute at least 90% of taxable income as dividends, meaning SCHH can provide a steady income stream.
4) Liquidity & Easy Access
- Since it’s an ETF, it trades like a stock, making it easy to buy and sell.
5) Hedge Against Inflation
- Real estate has historically been a good hedge against inflation because rents and property values tend to rise over time.
Cons of Investing in Schwab U.S. REIT ETF
1) Interest Rate Sensitivity
- REITs tend to underperform when interest rates rise because higher rates make borrowing more expensive and make bonds more attractive in comparison.
- The current high-interest-rate environment may pressure REITs.
2) Market Volatility
- SCHH is subject to real estate market fluctuations, and property values can decline in economic downturns.
3) Excludes Mortgage & Hybrid REITs
- SCHH only invests in equity REITs, meaning it does not benefit from mortgage REITs that profit from lending.
4) Dividend Yields May Fluctuate
- While SCHH offers potential dividends, distributions depend on REIT earnings, which can be impacted by economic conditions.
Is Schwab U.S. REIT ETF Right for You?
Good for:
- Long-term investors looking for real estate exposure
- Income-focused investors seeking dividends
- Those wanting a low-cost way to invest in REITs
Not ideal for:
- Investors who need short-term stability (due to volatility)
- Those who are highly sensitive to interest rate risk
Final Verdict
- SCHH is a solid choice if you believe in the long-term growth of the U.S. real estate sector and can handle short-term volatility.
- However, if interest rates continue rising, REITs (including SCHH) may struggle.
Schwab U.S. REIT ETF Top Holdings
As of February 19, 2025, the Schwab U.S. REIT ETF (SCHH) holds a diversified portfolio of U.S. equity Real Estate Investment Trusts (REITs). The top holdings and their respective allocations are:
- Prologis, Inc. (PLD) – 8.33%
- Equinix, Inc. (EQIX) – 6.67%
- American Tower Corporation (AMT) – 6.57%
- Welltower Inc. (WELL) – 4.74%
- Simon Property Group, Inc. (SPG) – 4.33%
- Digital Realty Trust, Inc. (DLR) – 3.92%
- Realty Income Corporation (O) – 3.67%
- Public Storage (PSA) – 3.56%
- Crown Castle Inc. (CCI) – 2.95%
- Extra Space Storage Inc. (EXR) – 2.49%
These top ten holdings constitute approximately 47.1% of the ETF’s total assets.
Schwab U.S. REIT ETF Returns
As of February 20, 2025, the Schwab U.S. REIT ETF (SCHH) has demonstrated the following performance metrics:
| Time Period | Total Return | Annualized Return |
| 1 Year | 5.00% | 5.00% |
| 3 Years | 15.76% | 5.00% |
| 5 Years | 28.63% | 5.16% |
| Since Inception (2011) | 146.18% | 6.77% |
These figures indicate that SCHH has provided consistent returns over various time horizons, with an annualized return of 6.77% since its inception in 2011. However, past performance does not guarantee future results, and it’s essential to consider your financial goals and risk tolerance before investing.
Strengths of Schwab U.S. REIT ETF (SCHH)
1) Low Expense Ratio (0.07%)
- One of the most cost-effective REIT ETFs compared to competitors like VNQ (0.12%) and IYR (0.39%).
2) Diversified Exposure to U.S. REITs
- SCHH holds a broad range of equity REITs across sectors like industrial, retail, healthcare, and residential properties.
3) Dividend Income Potential
- REITs are legally required to distribute at least 90% of taxable income, making SCHH a potential source of steady dividends.
4) Inflation Hedge
- Real estate assets historically appreciate over time, providing a potential hedge against inflation.
5) High Liquidity
- As an ETF traded on NYSE Arca, SCHH offers easy entry and exit compared to direct real estate investments.
Risks of Schwab U.S. REIT ETF (SCHH)
1) Interest Rate Sensitivity
- REITs tend to underperform in rising interest rate environments because borrowing costs increase, making real estate investments less attractive.
2) Market Volatility
- REIT prices fluctuate based on economic cycles—during downturns, property values and rental incomes may decline.
3) Excludes Mortgage & Hybrid REITs
- SCHH only holds equity REITs, missing potential gains from mortgage REITs that benefit from lending activities.
4) Sector-Specific Risks
- If a particular real estate sector (e.g., office or retail) struggles, SCHH’s performance could be impacted.
5) Dividend Uncertainty
- While SCHH provides dividend income, the payout depends on REIT earnings, which can decline in economic slowdowns.
Final Takeaway:
- Best for: Long-term investors seeking low-cost real estate exposure and dividend income.
- Not ideal for: Investors looking for short-term stability due to interest rate sensitivity and market fluctuations.
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