The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the Schwab U.S. TIPS ETF (SCHP) are both among the Top 100 ETFs. DIA is a SPDR State Street Global Advisors Large Value fund and SCHP is a Schwab ETFs Inflation-Protected Bond fund. So, what’s the difference between DIA and SCHP? And which fund is better?
The expense ratio of DIA is 0.11 percentage points higher than SCHP’s (0.16% vs. 0.05%). DIA also has a high exposure to the financial services sector while SCHP is mostly comprised of AAA bonds. Overall, DIA has provided higher returns than SCHP over the past 10 years.
In this article, we’ll compare DIA vs. SCHP. We’ll look at holdings and performance, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss DIA’s and SCHP’s industry exposure, risk metrics, and fund composition and examine how these affect their overall returns.
Summary
| DIA | SCHP | |
| Name | SPDR Dow Jones Industrial Average ETF Trust | Schwab U.S. TIPS ETF |
| Category | Large Value | Inflation-Protected Bond |
| Issuer | SPDR State Street Global Advisors | Schwab ETFs |
| AUM | 30.46B | 18.41B |
| Avg. Return | 13.35% | 3.92% |
| Div. Yield | 1.61% | 1.97% |
| Expense Ratio | 0.16% | 0.05% |
The SPDR Dow Jones Industrial Average ETF Trust (DIA) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 30.46B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.61% with an expense ratio of 0.16%.
The Schwab U.S. TIPS ETF (SCHP) is a Inflation-Protected Bond fund that is issued by Schwab ETFs. It currently has 18.41B total assets under management and has yielded an average annual return of 3.92% over the past 10 years. The fund has a dividend yield of 1.97% with an expense ratio of 0.05%.
DIA’s dividend yield is 0.36% lower than that of SCHP (1.61% vs. 1.97%). Also, DIA yielded on average 9.44% more per year over the past decade (13.35% vs. 3.92%). The expense ratio of DIA is 0.11 percentage points higher than SCHP’s (0.16% vs. 0.05%).
Fund Composition
Holdings
| DIA Holdings | Weight |
| UnitedHealth Group Inc | 7.63% |
| Goldman Sachs Group Inc | 7.23% |
| The Home Depot Inc | 6.07% |
| Microsoft Corp | 5.16% |
| Salesforce.com Inc | 4.65% |
| Amgen Inc | 4.64% |
| Boeing Co | 4.56% |
| Visa Inc Class A | 4.45% |
| McDonald’s Corp | 4.4% |
| Honeywell International Inc | 4.18% |
DIA’s Top Holdings are UnitedHealth Group Inc, Goldman Sachs Group Inc, The Home Depot Inc, Microsoft Corp, and Salesforce.com Inc at 7.63%, 7.23%, 6.07%, 5.16%, and 4.65%.
Amgen Inc (4.64%), Boeing Co (4.56%), and Visa Inc Class A (4.45%) have a slightly smaller but still significant weight. McDonald’s Corp and Honeywell International Inc are also represented in the DIA’s holdings at 4.4% and 4.18%.
| SCHP Bond Sectors | Weight |
| AAA | 100.0% |
| Others | 0.0% |
| Below B | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| BBB | 0.0% |
| A | 0.0% |
| AA | 0.0% |
| US Government | 0.0% |
SCHP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
Risk Analysis
| DIA | SCHP | |
| Mean Return | 1.13 | 0.28 |
| R-squared | 93.31 | 66.16 |
| Std. Deviation | 13.68 | 4.32 |
| Alpha | -0.94 | -0.5 |
| Beta | 0.97 | 1.17 |
| Sharpe Ratio | 0.94 | 0.64 |
| Treynor Ratio | 13.07 | 2.31 |
The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a R-squared of 93.31 with a Sharpe Ratio of 0.94 and a Beta of 0.97. Its Standard Deviation is 13.68 while DIA’s Treynor Ratio is 13.07. Furthermore, the fund has a Mean Return of 1.13 and a Alpha of -0.94.
The Schwab U.S. TIPS ETF (SCHP) has a Beta of 1.17 with a Sharpe Ratio of 0.64 and a Mean Return of 0.28. Its Alpha is -0.5 while SCHP’s Treynor Ratio is 2.31. Furthermore, the fund has a Standard Deviation of 4.32 and a R-squared of 66.16.
DIA’s Mean Return is 0.85 points higher than that of SCHP and its R-squared is 27.15 points higher. With a Standard Deviation of 13.68, DIA is slightly more volatile than SCHP. The Alpha and Beta of DIA are 0.44 points lower and 0.20 points lower than SCHP’s Alpha and Beta.
Performance
Annual Returns
| Year | DIA | SCHP |
| 2020 | 9.63% | 10.94% |
| 2019 | 25.09% | 8.36% |
| 2018 | -3.6% | -1.31% |
| 2017 | 27.97% | 2.95% |
| 2016 | 16.28% | 4.6% |
| 2015 | 0.1% | -1.5% |
| 2014 | 9.88% | 3.56% |
| 2013 | 29.41% | -8.66% |
| 2012 | 10.04% | 6.83% |
| 2011 | 8.21% | 13.38% |
| 2010 | 13.87% | 0.0% |
DIA had its best year in 2013 with an annual return of 29.41%. DIA’s worst year over the past decade yielded -3.6% and occurred in 2018. In most years the SPDR Dow Jones Industrial Average ETF Trust provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 9.88%, 10.04%, and 13.87% respectively.
The year 2011 was the strongest year for SCHP, returning 13.38% on an annual basis. The poorest year for SCHP in the last ten years was 2013, with a yield of -8.66%. Most years the Schwab U.S. TIPS ETF has given investors modest returns, such as in 2017, 2014, and 2016, when gains were 2.95%, 3.56%, and 4.6% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| DIA | $10,000 | $33,341 | 13.35% |
| SCHP | $10,000 | $14,418 | 3.92% |
A $10,000 investment in DIA would have resulted in a final balance of $33,341. This is a profit of $23,341 over 10 years and amounts to a compound annual growth rate (CAGR) of 13.35%.
With a $10,000 investment in SCHP, the end total would have been $14,418. This equates to a $4,418 profit over 10 years and a compound annual growth rate (CAGR) of 3.92%.
DIA’s CAGR is 9.44 percentage points higher than that of SCHP and as a result, would have yielded $18,923 more on a $10,000 investment. Thus, DIA outperformed SCHP by 9.44% annually.
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