ACWI vs. SCHG: What’s The Difference?

The iShares MSCI ACWI ETF (ACWI) and the Schwab U.S. Large-Cap Growth ETF (SCHG) are both among the Top 100 ETFs. ACWI is a iShares N/A fund and SCHG is a Schwab ETFs Large Growth fund. So, what’s the difference between ACWI and SCHG? And which fund is better?

The expense ratio of ACWI is 0.28 percentage points higher than SCHG’s (0.32% vs. 0.04%). ACWI also has a lower exposure to the technology sector and a lower standard deviation. Overall, ACWI has provided lower returns than SCHG over the past 10 years.

In this article, we’ll compare ACWI vs. SCHG. We’ll look at annual returns and fund composition, as well as at their risk metrics and industry exposure. Moreover, I’ll also discuss ACWI’s and SCHG’s holdings, portfolio growth, and performance and examine how these affect their overall returns.

Summary

ACWI SCHG
Name iShares MSCI ACWI ETF Schwab U.S. Large-Cap Growth ETF
Category N/A Large Growth
Issuer iShares Schwab ETFs
AUM 16.85B 15.16B
Avg. Return 10.21% 17.81%
Div. Yield 1.39% 0.43%
Expense Ratio 0.32% 0.04%

The iShares MSCI ACWI ETF (ACWI) is a N/A fund that is issued by iShares. It currently has 16.85B total assets under management and has yielded an average annual return of 10.21% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.32%.

The Schwab U.S. Large-Cap Growth ETF (SCHG) is a Large Growth fund that is issued by Schwab ETFs. It currently has 15.16B total assets under management and has yielded an average annual return of 17.81% over the past 10 years. The fund has a dividend yield of 0.43% with an expense ratio of 0.04%.

ACWI’s dividend yield is 0.96% higher than that of SCHG (1.39% vs. 0.43%). Also, ACWI yielded on average 7.60% less per year over the past decade (10.21% vs. 17.81%). The expense ratio of ACWI is 0.28 percentage points higher than SCHG’s (0.32% vs. 0.04%).

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Fund Composition

Industry Exposure

ACWI vs. SCHG - Industry Exposure

ACWI SCHG
Technology 20.41% 39.21%
Industrials 9.65% 3.01%
Energy 3.48% 0.2%
Communication Services 9.87% 17.07%
Utilities 2.61% 0.0%
Healthcare 11.74% 12.05%
Consumer Defensive 7.15% 2.15%
Real Estate 2.75% 1.64%
Financial Services 15.58% 7.98%
Consumer Cyclical 12.01% 15.01%
Basic Materials 4.73% 1.68%

The iShares MSCI ACWI ETF (ACWI) has the most exposure to the Technology sector at 20.41%. This is followed by Financial Services and Consumer Cyclical at 15.58% and 12.01% respectively. Real Estate (2.75%), Energy (3.48%), and Basic Materials (4.73%) only make up 10.96% of the fund’s total assets.

ACWI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Healthcare, and Consumer Cyclical stocks at 7.15%, 9.65%, 9.87%, 11.74%, and 12.01%.

The Schwab U.S. Large-Cap Growth ETF (SCHG) has the most exposure to the Technology sector at 39.21%. This is followed by Communication Services and Consumer Cyclical at 17.07% and 15.01% respectively. Energy (0.2%), Real Estate (1.64%), and Basic Materials (1.68%) only make up 3.52% of the fund’s total assets.

SCHG’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 2.15%, 3.01%, 7.98%, 12.05%, and 15.01%.

ACWI is 18.80% less exposed to the Technology sector than SCHG (20.41% vs 39.21%). ACWI’s exposure to Financial Services and Consumer Cyclical stocks is 7.60% higher and 3.00% lower respectively (15.58% vs. 7.98% and 12.01% vs. 15.01%). In total, Real Estate, Energy, and Basic Materials also make up 7.44% more of the fund’s holdings compared to SCHG (10.96% vs. 3.52%).

Holdings

ACWI - Holdings

ACWI Holdings Weight
Apple Inc 3.44%
Microsoft Corp 2.91%
Amazon.com Inc 2.21%
Facebook Inc A 1.25%
Alphabet Inc Class C 1.12%
Alphabet Inc A 1.09%
Taiwan Semiconductor Manufacturing Co Ltd 0.79%
Tesla Inc 0.78%
NVIDIA Corp 0.74%
JPMorgan Chase & Co 0.71%

ACWI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc Class C at 3.44%, 2.91%, 2.21%, 1.25%, and 1.12%.

Alphabet Inc A (1.09%), Taiwan Semiconductor Manufacturing Co Ltd (0.79%), and Tesla Inc (0.78%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ACWI’s holdings at 0.74% and 0.71%.

SCHG - Holdings

SCHG Holdings Weight
Apple Inc 11.49%
Microsoft Corp 10.91%
Amazon.com Inc 7.89%
Facebook Inc A 4.45%
Alphabet Inc A 3.93%
Alphabet Inc Class C 3.82%
Tesla Inc 2.8%
NVIDIA Corp 2.67%
Visa Inc Class A 2.12%
UnitedHealth Group Inc 2.02%

SCHG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 11.49%, 10.91%, 7.89%, 4.45%, and 3.93%.

Alphabet Inc Class C (3.82%), Tesla Inc (2.8%), and NVIDIA Corp (2.67%) have a slightly smaller but still significant weight. Visa Inc Class A and UnitedHealth Group Inc are also represented in the SCHG’s holdings at 2.12% and 2.02%.

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Risk Analysis

ACWI SCHG
Mean Return 0.89 1.46
R-squared 99.96 92.92
Std. Deviation 14.05 14.78
Alpha 0.15 1.97
Beta 1 1.05
Sharpe Ratio 0.71 1.14
Treynor Ratio 9.45 16.3

The iShares MSCI ACWI ETF (ACWI) has a Mean Return of 0.89 with a Sharpe Ratio of 0.71 and a Beta of 1. Its Alpha is 0.15 while ACWI’s R-squared is 99.96. Furthermore, the fund has a Standard Deviation of 14.05 and a Treynor Ratio of 9.45.

The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Sharpe Ratio of 1.14 with a Alpha of 1.97 and a Standard Deviation of 14.78. Its Beta is 1.05 while SCHG’s Mean Return is 1.46. Furthermore, the fund has a R-squared of 92.92 and a Treynor Ratio of 16.3.

ACWI’s Mean Return is 0.57 points lower than that of SCHG and its R-squared is 7.04 points higher. With a Standard Deviation of 14.05, ACWI is slightly less volatile than SCHG. The Alpha and Beta of ACWI are 1.82 points lower and 0.05 points lower than SCHG’s Alpha and Beta.

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Performance

Annual Returns

ACWI vs. SCHG - Annual Returns

Year ACWI SCHG
2020 16.38% 39.13%
2019 26.7% 36.21%
2018 -9.15% -1.35%
2017 24.35% 28.04%
2016 8.22% 6.76%
2015 -2.39% 3.26%
2014 4.64% 15.74%
2013 22.91% 33.96%
2012 15.99% 17.02%
2011 -7.6% -0.67%
2010 12.31% 16.83%

ACWI had its best year in 2019 with an annual return of 26.7%. ACWI’s worst year over the past decade yielded -9.15% and occurred in 2018. In most years the iShares MSCI ACWI ETF provided moderate returns such as in 2016, 2010, and 2012 where annual returns amounted to 8.22%, 12.31%, and 15.99% respectively.

The year 2020 was the strongest year for SCHG, returning 39.13% on an annual basis. The poorest year for SCHG in the last ten years was 2018, with a yield of -1.35%. Most years the Schwab U.S. Large-Cap Growth ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 15.74%, 16.83%, and 17.02% respectively.

Portfolio Growth

ACWI vs. SCHG - Portfolio Growth

Fund Initial Balance Final Balance CAGR
ACWI $10,000 $24,255 10.21%
SCHG $10,000 $47,556 17.81%

A $10,000 investment in ACWI would have resulted in a final balance of $24,255. This is a profit of $14,255 over 10 years and amounts to a compound annual growth rate (CAGR) of 10.21%.

With a $10,000 investment in SCHG, the end total would have been $47,556. This equates to a $37,556 profit over 10 years and a compound annual growth rate (CAGR) of 17.81%.

ACWI’s CAGR is 7.60 percentage points lower than that of SCHG and as a result, would have yielded $23,301 less on a $10,000 investment. Thus, ACWI performed worse than SCHG by 7.60% annually.


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