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ITOT vs. SCHB: What’s The Difference?

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the Schwab U.S. Broad Market ETF (SCHB) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and SCHB is a Schwab ETFs Large Blend fund. So, what’s the difference between ITOT and SCHB? And which fund is better?

ITOT and SCHB have the same expense ratio: 0.03%. ITOT also has a higher exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided higher returns than SCHB over the past ten years.

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

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Summary

ITOTSCHB
NameiShares Core S&P Total U.S. Stock Market ETFSchwab U.S. Broad Market ETF
CategoryLarge BlendLarge Blend
IssueriSharesSchwab ETFs
AUM41.97B21.44B
Avg. Return14.59%14.43%
Div. Yield1.2%1.39%
Expense Ratio0.03%0.03%

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) is a Large Blend fund that is issued by iShares. It currently has 41.97B total assets under management and has yielded an average annual return of 14.59% over the past 10 years. The fund has a dividend yield of 1.2% with an expense ratio of 0.03%.

The Schwab U.S. Broad Market ETF (SCHB) is a Large Blend fund that is issued by Schwab ETFs. It currently has 21.44B total assets under management and has yielded an average annual return of 14.43% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.03%.

ITOT’s dividend yield is 0.19% lower than that of SCHB (1.2% vs. 1.39%). Also, ITOT yielded on average 0.16% more per year over the past decade (14.59% vs. 14.43%). ITOT and SCHB have the same expense ratio: 0.03%.

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Fund Composition

Industry Exposure

ITOT vs. SCHB - Industry Exposure

ITOTSCHB
Technology24.49%24.15%
Industrials9.21%9.29%
Energy2.51%2.78%
Communication Services10.54%10.52%
Utilities2.35%2.32%
Healthcare13.59%13.37%
Consumer Defensive5.79%5.76%
Real Estate3.67%3.58%
Financial Services13.69%13.88%
Consumer Cyclical11.69%11.9%
Basic Materials2.47%2.45%

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has the most exposure to the Technology sector at 24.49%. This is followed by Financial Services and Healthcare at 13.69% and 13.59% respectively. Basic Materials (2.47%), Energy (2.51%), and Real Estate (3.67%) only make up 8.65% of the fund’s total assets.

ITOT’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.79%, 9.21%, 10.54%, 11.69%, and 13.59%.

The Schwab U.S. Broad Market ETF (SCHB) has the most exposure to the Technology sector at 24.15%. This is followed by Financial Services and Healthcare at 13.88% and 13.37% respectively. Basic Materials (2.45%), Energy (2.78%), and Real Estate (3.58%) only make up 8.81% of the fund’s total assets.

SCHB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.76%, 9.29%, 10.52%, 11.9%, and 13.37%.

ITOT is 0.34% more exposed to the Technology sector than SCHB (24.49% vs 24.15%). ITOT’s exposure to Financial Services and Healthcare stocks is 0.19% lower and 0.22% higher respectively (13.69% vs. 13.88% and 13.59% vs. 13.37%). In total, Basic Materials, Energy, and Real Estate also make up 0.16% less of the fund’s holdings compared to SCHB (8.65% vs. 8.81%).

Holdings

ITOT - Holdings

ITOT HoldingsWeight
Apple Inc5.07%
Microsoft Corp4.75%
Amazon.com Inc3.16%
Facebook Inc Class A1.89%
Alphabet Inc Class A1.79%
Alphabet Inc Class C1.71%
Tesla Inc1.17%
Berkshire Hathaway Inc Class B1.17%
NVIDIA Corp1.08%
JPMorgan Chase & Co1.02%

ITOT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.07%, 4.75%, 3.16%, 1.89%, and 1.79%.

Alphabet Inc Class C (1.71%), Tesla Inc (1.17%), and Berkshire Hathaway Inc Class B (1.17%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ITOT’s holdings at 1.08% and 1.02%.

SCHB - Holdings

SCHB HoldingsWeight
Apple Inc4.86%
Microsoft Corp4.61%
Amazon.com Inc3.33%
Facebook Inc A1.88%
Alphabet Inc A1.66%
Alphabet Inc Class C1.61%
Berkshire Hathaway Inc Class B1.19%
Tesla Inc1.18%
NVIDIA Corp1.13%
JPMorgan Chase & Co1.06%

SCHB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 4.86%, 4.61%, 3.33%, 1.88%, and 1.66%.

Alphabet Inc Class C (1.61%), Berkshire Hathaway Inc Class B (1.19%), and Tesla Inc (1.18%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHB’s holdings at 1.13% and 1.06%.

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Risk Analysis

ITOTSCHB
Mean Return1.271.23
R-squared99.499.33
Std. Deviation14.0214.12
Alpha-0.54-0.58
Beta1.031.04
Sharpe Ratio1.041
Treynor Ratio14.1313.58

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Alpha of -0.54 with a Treynor Ratio of 14.13 and a Standard Deviation of 14.02. Its Beta is 1.03 while ITOT’s Sharpe Ratio is 1.04. Furthermore, the fund has a Mean Return of 1.27 and a R-squared of 99.4.

The Schwab U.S. Broad Market ETF (SCHB) has a Alpha of -0.58 with a Sharpe Ratio of 1 and a R-squared of 99.33. Its Mean Return is 1.23 while SCHB’s Standard Deviation is 14.12. Furthermore, the fund has a Treynor Ratio of 13.58 and a Beta of 1.04.

ITOT’s Mean Return is 0.04 points higher than that of SCHB and its R-squared is 0.07 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than SCHB. The Alpha and Beta of ITOT are 0.04 points higher and 0.01 points lower than SCHB’s Alpha and Beta.

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Performance

Annual Returns

ITOT vs. SCHB - Annual Returns

YearITOTSCHB
202020.75%20.77%
201930.87%30.94%
2018-5.27%-5.25%
201721.23%21.18%
201612.59%12.56%
20150.96%0.45%
201413.01%12.67%
201332.67%33.37%
201215.98%16.22%
20111.55%1.4%
201016.15%17.1%

ITOT had its best year in 2013 with an annual return of 32.67%. ITOT’s worst year over the past decade yielded -5.27% and occurred in 2018. In most years the iShares Core S&P Total U.S. Stock Market ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.01%, 15.98%, and 16.15% respectively.

The year 2013 was the strongest year for SCHB, returning 33.37% on an annual basis. The poorest year for SCHB in the last ten years was 2018, with a yield of -5.25%. Most years the Schwab U.S. Broad Market ETF has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 12.67%, 16.22%, and 17.1% respectively.

Portfolio Growth

ITOT vs. SCHB - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
ITOT$10,000$36,42714.59%
SCHB$10,000$36,35414.43%

A $10,000 investment in ITOT would have resulted in a final balance of $36,427. This is a profit of $26,427 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.59%.

With a $10,000 investment in SCHB, the end total would have been $36,354. This equates to a $26,354 profit over 10 years and a compound annual growth rate (CAGR) of 14.43%.

ITOT’s CAGR is 0.16 percentage points higher than that of SCHB and as a result, would have yielded $73 more on a $10,000 investment. Thus, ITOT outperformed SCHB by 0.16% annually.


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