The iShares Gold Trust (IAU) and the Schwab U.S. Small-Cap ETF (SCHA) are both among the Top 100 ETFs. IAU is a iShares N/A fund and SCHA is a Schwab ETFs Small Blend fund. So, what’s the difference between IAU and SCHA? And which fund is better?
The expense ratio of IAU is 0.21 percentage points higher than SCHA’s (0.25% vs. 0.04%). IAU also has a lower exposure to the technology sector and a lower standard deviation. Overall, IAU has provided lower returns than SCHA over the past 10 years.
In this article, we’ll compare IAU vs. SCHA. We’ll look at fund composition and industry exposure, as well as at their risk metrics and annual returns. Moreover, I’ll also discuss IAU’s and SCHA’s portfolio growth, holdings, and performance and examine how these affect their overall returns.
Summary
| IAU | SCHA | |
| Name | iShares Gold Trust | Schwab U.S. Small-Cap ETF |
| Category | N/A | Small Blend |
| Issuer | iShares | Schwab ETFs |
| AUM | 28.61B | 16.51B |
| Avg. Return | 6.03% | 12.62% |
| Div. Yield | 0.0% | 0.98% |
| Expense Ratio | 0.25% | 0.04% |
The iShares Gold Trust (IAU) is a N/A fund that is issued by iShares. It currently has 28.61B total assets under management and has yielded an average annual return of 6.03% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.25%.
The Schwab U.S. Small-Cap ETF (SCHA) is a Small Blend fund that is issued by Schwab ETFs. It currently has 16.51B total assets under management and has yielded an average annual return of 12.62% over the past 10 years. The fund has a dividend yield of 0.98% with an expense ratio of 0.04%.
IAU’s dividend yield is 0.98% lower than that of SCHA (0.0% vs. 0.98%). Also, IAU yielded on average 6.59% less per year over the past decade (6.03% vs. 12.62%). The expense ratio of IAU is 0.21 percentage points higher than SCHA’s (0.25% vs. 0.04%).
Fund Composition
Industry Exposure
| IAU | SCHA | |
| Technology | 0.0% | 14.91% |
| Industrials | 0.0% | 15.37% |
| Energy | 0.0% | 3.35% |
| Communication Services | 0.0% | 3.5% |
| Utilities | 0.0% | 1.83% |
| Healthcare | 0.0% | 16.5% |
| Consumer Defensive | 0.0% | 3.75% |
| Real Estate | 0.0% | 7.83% |
| Financial Services | 0.0% | 14.49% |
| Consumer Cyclical | 0.0% | 14.48% |
| Basic Materials | 0.0% | 3.98% |
The iShares Gold Trust (IAU) has the most exposure to the Technology sector at 0.0%. This is followed by Industrials and Energy at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.
IAU’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Energy stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
The Schwab U.S. Small-Cap ETF (SCHA) has the most exposure to the Healthcare sector at 16.5%. This is followed by Industrials and Technology at 15.37% and 14.91% respectively. Energy (3.35%), Communication Services (3.5%), and Consumer Defensive (3.75%) only make up 10.60% of the fund’s total assets.
SCHA’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Technology stocks at 3.98%, 7.83%, 14.48%, 14.49%, and 14.91%.
IAU is 14.91% less exposed to the Technology sector than SCHA (0.0% vs 14.91%). IAU’s exposure to Industrials and Energy stocks is 15.37% lower and 3.35% lower respectively (0.0% vs. 15.37% and 0.0% vs. 3.35%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 36.80% less of the fund’s holdings compared to SCHA (0.00% vs. 36.80%).
Holdings
| IAU Holdings | Weight |
| Gold | 100.0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
IAU’s Top Holdings are Gold, N/A, N/A, N/A, and N/A at 100.0%, 0%, 0%, 0%, and 0%.
N/A (0%), N/A (0%), and N/A (0%) have a slightly smaller but still significant weight. N/A and N/A are also represented in the IAU’s holdings at 0% and 0%.
| SCHA Holdings | Weight |
| AMC Entertainment Holdings Inc Class A | 0.67% |
| Caesars Entertainment Inc | 0.51% |
| Cloudflare Inc | 0.48% |
| NovoCure Ltd | 0.45% |
| Plug Power Inc | 0.41% |
| 10x Genomics Inc Ordinary Shares – Class A | 0.34% |
| GameStop Corp Class A | 0.28% |
| RH | 0.27% |
| Penn National Gaming Inc | 0.27% |
| Axon Enterprise Inc | 0.27% |
SCHA’s Top Holdings are AMC Entertainment Holdings Inc Class A, Caesars Entertainment Inc, Cloudflare Inc, NovoCure Ltd, and Plug Power Inc at 0.67%, 0.51%, 0.48%, 0.45%, and 0.41%.
10x Genomics Inc Ordinary Shares – Class A (0.34%), GameStop Corp Class A (0.28%), and RH (0.27%) have a slightly smaller but still significant weight. Penn National Gaming Inc and Axon Enterprise Inc are also represented in the SCHA’s holdings at 0.27% and 0.27%.
Risk Analysis
| IAU | SCHA | |
| Mean Return | 0.23 | 1.14 |
| R-squared | 16.03 | 82.26 |
| Std. Deviation | 16.97 | 18.68 |
| Alpha | 4.16 | -4.65 |
| Beta | 0.48 | 1.25 |
| Sharpe Ratio | 0.13 | 0.7 |
| Treynor Ratio | 1.5 | 9.62 |
The iShares Gold Trust (IAU) has a Alpha of 4.16 with a Mean Return of 0.23 and a Treynor Ratio of 1.5. Its Standard Deviation is 16.97 while IAU’s Sharpe Ratio is 0.13. Furthermore, the fund has a Beta of 0.48 and a R-squared of 16.03.
The Schwab U.S. Small-Cap ETF (SCHA) has a Sharpe Ratio of 0.7 with a Mean Return of 1.14 and a R-squared of 82.26. Its Beta is 1.25 while SCHA’s Treynor Ratio is 9.62. Furthermore, the fund has a Alpha of -4.65 and a Standard Deviation of 18.68.
IAU’s Mean Return is 0.91 points lower than that of SCHA and its R-squared is 66.23 points lower. With a Standard Deviation of 16.97, IAU is slightly less volatile than SCHA. The Alpha and Beta of IAU are 8.81 points higher and 0.77 points lower than SCHA’s Alpha and Beta.
Performance
Annual Returns
| Year | IAU | SCHA |
| 2020 | 23.86% | 19.35% |
| 2019 | 18.54% | 26.54% |
| 2018 | -1.39% | -11.75% |
| 2017 | 11.58% | 15.04% |
| 2016 | 8.85% | 19.88% |
| 2015 | -11.65% | -4.24% |
| 2014 | -0.44% | 6.53% |
| 2013 | -27.96% | 39.59% |
| 2012 | 8.37% | 18.24% |
| 2011 | 8.66% | -2.95% |
| 2010 | 27.93% | 28.31% |
IAU had its best year in 2010 with an annual return of 27.93%. IAU’s worst year over the past decade yielded -27.96% and occurred in 2013. In most years the iShares Gold Trust provided moderate returns such as in 2012, 2011, and 2016 where annual returns amounted to 8.37%, 8.66%, and 8.85% respectively.
The year 2013 was the strongest year for SCHA, returning 39.59% on an annual basis. The poorest year for SCHA in the last ten years was 2018, with a yield of -11.75%. Most years the Schwab U.S. Small-Cap ETF has given investors modest returns, such as in 2017, 2012, and 2020, when gains were 15.04%, 18.24%, and 19.35% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IAU | $10,000 | $13,121 | 6.03% |
| SCHA | $10,000 | $30,035 | 12.62% |
A $10,000 investment in IAU would have resulted in a final balance of $13,121. This is a profit of $3,121 over 10 years and amounts to a compound annual growth rate (CAGR) of 6.03%.
With a $10,000 investment in SCHA, the end total would have been $30,035. This equates to a $20,035 profit over 10 years and a compound annual growth rate (CAGR) of 12.62%.
IAU’s CAGR is 6.59 percentage points lower than that of SCHA and as a result, would have yielded $16,914 less on a $10,000 investment. Thus, IAU performed worse than SCHA by 6.59% annually.
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