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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.

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Summary

ACWISCHG
NameiShares MSCI ACWI ETFSchwab U.S. Large-Cap Growth ETF
CategoryN/ALarge Growth
IssueriSharesSchwab ETFs
AUM16.85B15.16B
Avg. Return10.21%17.81%
Div. Yield1.39%0.43%
Expense Ratio0.32%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

ACWISCHG
Technology20.41%39.21%
Industrials9.65%3.01%
Energy3.48%0.2%
Communication Services9.87%17.07%
Utilities2.61%0.0%
Healthcare11.74%12.05%
Consumer Defensive7.15%2.15%
Real Estate2.75%1.64%
Financial Services15.58%7.98%
Consumer Cyclical12.01%15.01%
Basic Materials4.73%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 HoldingsWeight
Apple Inc3.44%
Microsoft Corp2.91%
Amazon.com Inc2.21%
Facebook Inc A1.25%
Alphabet Inc Class C1.12%
Alphabet Inc A1.09%
Taiwan Semiconductor Manufacturing Co Ltd0.79%
Tesla Inc0.78%
NVIDIA Corp0.74%
JPMorgan Chase & Co0.71%

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 HoldingsWeight
Apple Inc11.49%
Microsoft Corp10.91%
Amazon.com Inc7.89%
Facebook Inc A4.45%
Alphabet Inc A3.93%
Alphabet Inc Class C3.82%
Tesla Inc2.8%
NVIDIA Corp2.67%
Visa Inc Class A2.12%
UnitedHealth Group Inc2.02%

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

ACWISCHG
Mean Return0.891.46
R-squared99.9692.92
Std. Deviation14.0514.78
Alpha0.151.97
Beta11.05
Sharpe Ratio0.711.14
Treynor Ratio9.4516.3

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

YearACWISCHG
202016.38%39.13%
201926.7%36.21%
2018-9.15%-1.35%
201724.35%28.04%
20168.22%6.76%
2015-2.39%3.26%
20144.64%15.74%
201322.91%33.96%
201215.99%17.02%
2011-7.6%-0.67%
201012.31%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

FundInitial BalanceFinal BalanceCAGR
ACWI$10,000$24,25510.21%
SCHG$10,000$47,55617.81%

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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