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IJR vs. SCHF: What’s The Difference?

The iShares Core S&P Small-Cap ETF (IJR) and the Schwab International Equity ETF (SCHF) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and SCHF is a Schwab ETFs Foreign Large Blend fund. So, what’s the difference between IJR and SCHF? And which fund is better?

IJR and SCHF have the same expense ratio: 0.06%. IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided higher returns than SCHF over the past ten years.

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

Introduction To Mutual Funds
Introduction To Mutual Funds
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Summary

IJRSCHF
NameiShares Core S&P Small-Cap ETFSchwab International Equity ETF
CategorySmall BlendForeign Large Blend
IssueriSharesSchwab ETFs
AUM68.64B26.99B
Avg. Return13.97%6.43%
Div. Yield0.96%2.16%
Expense Ratio0.06%0.06%

The iShares Core S&P Small-Cap ETF (IJR) is a Small Blend fund that is issued by iShares. It currently has 68.64B total assets under management and has yielded an average annual return of 13.97% over the past 10 years. The fund has a dividend yield of 0.96% with an expense ratio of 0.06%.

The Schwab International Equity ETF (SCHF) is a Foreign Large Blend fund that is issued by Schwab ETFs. It currently has 26.99B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 2.16% with an expense ratio of 0.06%.

IJR’s dividend yield is 1.20% lower than that of SCHF (0.96% vs. 2.16%). Also, IJR yielded on average 7.54% more per year over the past decade (13.97% vs. 6.43%). IJR and SCHF have the same expense ratio: 0.06%.

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Fund Composition

Industry Exposure

IJR vs. SCHF - Industry Exposure

IJRSCHF
Technology14.32%11.55%
Industrials17.31%14.86%
Energy4.0%4.23%
Communication Services2.59%5.65%
Utilities1.8%3.09%
Healthcare11.55%11.05%
Consumer Defensive4.01%9.41%
Real Estate9.55%3.17%
Financial Services15.91%17.85%
Consumer Cyclical13.61%10.87%
Basic Materials5.34%8.26%

The iShares Core S&P Small-Cap ETF (IJR) has the most exposure to the Industrials sector at 17.31%. This is followed by Financial Services and Technology at 15.91% and 14.32% respectively. Communication Services (2.59%), Energy (4.0%), and Consumer Defensive (4.01%) only make up 10.60% of the fund’s total assets.

IJR’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Healthcare, Consumer Cyclical, and Technology stocks at 5.34%, 9.55%, 11.55%, 13.61%, and 14.32%.

The Schwab International Equity ETF (SCHF) has the most exposure to the Financial Services sector at 17.85%. This is followed by Industrials and Technology at 14.86% and 11.55% respectively. Real Estate (3.17%), Energy (4.23%), and Communication Services (5.65%) only make up 13.05% of the fund’s total assets.

SCHF’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Consumer Cyclical, Healthcare, and Technology stocks at 8.26%, 9.41%, 10.87%, 11.05%, and 11.55%.

IJR is 2.45% more exposed to the Industrials sector than SCHF (17.31% vs 14.86%). IJR’s exposure to Financial Services and Technology stocks is 1.94% lower and 2.77% higher respectively (15.91% vs. 17.85% and 14.32% vs. 11.55%). In total, Communication Services, Energy, and Consumer Defensive also make up 8.69% less of the fund’s holdings compared to SCHF (10.60% vs. 19.29%).

Holdings

IJR - Holdings

IJR HoldingsWeight
BlackRock Cash Funds Treasury SL Agency1.08%
GameStop Corp Class A0.86%
Omnicell Inc0.61%
Stamps.com Inc0.58%
Saia Inc0.57%
Power Integrations Inc0.57%
Exponent Inc0.54%
NeoGenomics Inc0.53%
Chart Industries Inc0.53%
Macy’s Inc0.51%

IJR’s Top Holdings are BlackRock Cash Funds Treasury SL Agency, GameStop Corp Class A, Omnicell Inc, Stamps.com Inc, and Saia Inc at 1.08%, 0.86%, 0.61%, 0.58%, and 0.57%.

Power Integrations Inc (0.57%), Exponent Inc (0.54%), and NeoGenomics Inc (0.53%) have a slightly smaller but still significant weight. Chart Industries Inc and Macy’s Inc are also represented in the IJR’s holdings at 0.53% and 0.51%.

SCHF - Holdings

SCHF HoldingsWeight
Nestle SA1.66%
Samsung Electronics Co Ltd1.6%
ASML Holding NV1.29%
Roche Holding AG1.24%
Toyota Motor Corp1.02%
LVMH Moet Hennessy Louis Vuitton SE0.93%
Novartis AG0.92%
Shopify Inc A0.78%
AstraZeneca PLC0.75%
SAP SE0.74%

SCHF’s Top Holdings are Nestle SA, Samsung Electronics Co Ltd, ASML Holding NV, Roche Holding AG, and Toyota Motor Corp at 1.66%, 1.6%, 1.29%, 1.24%, and 1.02%.

LVMH Moet Hennessy Louis Vuitton SE (0.93%), Novartis AG (0.92%), and Shopify Inc A (0.78%) have a slightly smaller but still significant weight. AstraZeneca PLC and SAP SE are also represented in the SCHF’s holdings at 0.75% and 0.74%.

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Risk Analysis

IJRSCHF
Mean Return1.210.58
R-squared76.0398.16
Std. Deviation18.6815.08
Alpha-3.70.53
Beta1.20.99
Sharpe Ratio0.740.42
Treynor Ratio10.775.39

The iShares Core S&P Small-Cap ETF (IJR) has a Sharpe Ratio of 0.74 with a Mean Return of 1.21 and a Treynor Ratio of 10.77. Its Standard Deviation is 18.68 while IJR’s R-squared is 76.03. Furthermore, the fund has a Beta of 1.2 and a Alpha of -3.7.

The Schwab International Equity ETF (SCHF) has a Beta of 0.99 with a Sharpe Ratio of 0.42 and a Mean Return of 0.58. Its R-squared is 98.16 while SCHF’s Standard Deviation is 15.08. Furthermore, the fund has a Treynor Ratio of 5.39 and a Alpha of 0.53.

IJR’s Mean Return is 0.63 points higher than that of SCHF and its R-squared is 22.13 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than SCHF. The Alpha and Beta of IJR are 4.23 points lower and 0.21 points higher than SCHF’s Alpha and Beta.

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Performance

Annual Returns

IJR vs. SCHF - Annual Returns

YearIJRSCHF
202011.24%9.86%
201922.79%22.15%
2018-8.43%-14.39%
201713.2%25.83%
201626.49%2.88%
2015-2.0%-2.44%
20145.67%-4.44%
201341.36%20.03%
201216.28%17.12%
20110.9%-12.32%
201026.14%8.6%

IJR had its best year in 2013 with an annual return of 41.36%. IJR’s worst year over the past decade yielded -8.43% and occurred in 2018. In most years the iShares Core S&P Small-Cap ETF provided moderate returns such as in 2020, 2017, and 2012 where annual returns amounted to 11.24%, 13.2%, and 16.28% respectively.

The year 2017 was the strongest year for SCHF, returning 25.83% on an annual basis. The poorest year for SCHF in the last ten years was 2018, with a yield of -14.39%. Most years the Schwab International Equity ETF has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 2.88%, 8.6%, and 9.86% respectively.

Portfolio Growth

IJR vs. SCHF - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IJR$10,000$30,75913.97%
SCHF$10,000$17,0896.43%

A $10,000 investment in IJR would have resulted in a final balance of $30,759. This is a profit of $20,759 over 10 years and amounts to a compound annual growth rate (CAGR) of 13.97%.

With a $10,000 investment in SCHF, the end total would have been $17,089. This equates to a $7,089 profit over 10 years and a compound annual growth rate (CAGR) of 6.43%.

IJR’s CAGR is 7.54 percentage points higher than that of SCHF and as a result, would have yielded $13,670 more on a $10,000 investment. Thus, IJR outperformed SCHF by 7.54% annually.


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