The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the Schwab International Equity ETF (SCHF) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and SCHF is a Schwab ETFs Foreign Large Blend fund. So, what’s the difference between ITOT and SCHF? And which fund is better?
The expense ratio of ITOT is 0.03 percentage points lower than SCHF’s (0.03% vs. 0.06%). ITOT also has a higher exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided higher returns than SCHF over the past ten years.
In this article, we’ll compare ITOT vs. SCHF. We’ll look at risk metrics and industry exposure, as well as at their portfolio growth and fund composition. Moreover, I’ll also discuss ITOT’s and SCHF’s holdings, annual returns, and performance and examine how these affect their overall returns.
Summary
| ITOT | SCHF | |
| Name | iShares Core S&P Total U.S. Stock Market ETF | Schwab International Equity ETF |
| Category | Large Blend | Foreign Large Blend |
| Issuer | iShares | Schwab ETFs |
| AUM | 41.97B | 26.99B |
| Avg. Return | 14.59% | 6.43% |
| Div. Yield | 1.2% | 2.16% |
| Expense Ratio | 0.03% | 0.06% |
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 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%.
ITOT’s dividend yield is 0.96% lower than that of SCHF (1.2% vs. 2.16%). Also, ITOT yielded on average 8.16% more per year over the past decade (14.59% vs. 6.43%). The expense ratio of ITOT is 0.03 percentage points lower than SCHF’s (0.03% vs. 0.06%).
Fund Composition
Industry Exposure
| ITOT | SCHF | |
| Technology | 24.49% | 11.55% |
| Industrials | 9.21% | 14.86% |
| Energy | 2.51% | 4.23% |
| Communication Services | 10.54% | 5.65% |
| Utilities | 2.35% | 3.09% |
| Healthcare | 13.59% | 11.05% |
| Consumer Defensive | 5.79% | 9.41% |
| Real Estate | 3.67% | 3.17% |
| Financial Services | 13.69% | 17.85% |
| Consumer Cyclical | 11.69% | 10.87% |
| Basic Materials | 2.47% | 8.26% |
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 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%.
ITOT is 12.94% more exposed to the Technology sector than SCHF (24.49% vs 11.55%). ITOT’s exposure to Financial Services and Healthcare stocks is 4.16% lower and 2.54% higher respectively (13.69% vs. 17.85% and 13.59% vs. 11.05%). In total, Basic Materials, Energy, and Real Estate also make up 7.01% less of the fund’s holdings compared to SCHF (8.65% vs. 15.66%).
Holdings
| ITOT Holdings | Weight |
| Apple Inc | 5.07% |
| Microsoft Corp | 4.75% |
| Amazon.com Inc | 3.16% |
| Facebook Inc Class A | 1.89% |
| Alphabet Inc Class A | 1.79% |
| Alphabet Inc Class C | 1.71% |
| Tesla Inc | 1.17% |
| Berkshire Hathaway Inc Class B | 1.17% |
| NVIDIA Corp | 1.08% |
| JPMorgan Chase & Co | 1.02% |
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%.
| SCHF Holdings | Weight |
| Nestle SA | 1.66% |
| Samsung Electronics Co Ltd | 1.6% |
| ASML Holding NV | 1.29% |
| Roche Holding AG | 1.24% |
| Toyota Motor Corp | 1.02% |
| LVMH Moet Hennessy Louis Vuitton SE | 0.93% |
| Novartis AG | 0.92% |
| Shopify Inc A | 0.78% |
| AstraZeneca PLC | 0.75% |
| SAP SE | 0.74% |
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%.
Risk Analysis
| ITOT | SCHF | |
| Mean Return | 1.27 | 0.58 |
| R-squared | 99.4 | 98.16 |
| Std. Deviation | 14.02 | 15.08 |
| Alpha | -0.54 | 0.53 |
| Beta | 1.03 | 0.99 |
| Sharpe Ratio | 1.04 | 0.42 |
| Treynor Ratio | 14.13 | 5.39 |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Alpha of -0.54 with a Standard Deviation of 14.02 and a Sharpe Ratio of 1.04. Its Treynor Ratio is 14.13 while ITOT’s R-squared is 99.4. Furthermore, the fund has a Beta of 1.03 and a Mean Return of 1.27.
The Schwab International Equity ETF (SCHF) has a Alpha of 0.53 with a Sharpe Ratio of 0.42 and a R-squared of 98.16. Its Beta is 0.99 while SCHF’s Treynor Ratio is 5.39. Furthermore, the fund has a Mean Return of 0.58 and a Standard Deviation of 15.08.
ITOT’s Mean Return is 0.69 points higher than that of SCHF and its R-squared is 1.24 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than SCHF. The Alpha and Beta of ITOT are 1.07 points lower and 0.04 points higher than SCHF’s Alpha and Beta.
Performance
Annual Returns
| Year | ITOT | SCHF |
| 2020 | 20.75% | 9.86% |
| 2019 | 30.87% | 22.15% |
| 2018 | -5.27% | -14.39% |
| 2017 | 21.23% | 25.83% |
| 2016 | 12.59% | 2.88% |
| 2015 | 0.96% | -2.44% |
| 2014 | 13.01% | -4.44% |
| 2013 | 32.67% | 20.03% |
| 2012 | 15.98% | 17.12% |
| 2011 | 1.55% | -12.32% |
| 2010 | 16.15% | 8.6% |
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 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
| Fund | Initial Balance | Final Balance | CAGR |
| ITOT | $10,000 | $36,427 | 14.59% |
| SCHF | $10,000 | $17,089 | 6.43% |
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 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%.
ITOT’s CAGR is 8.16 percentage points higher than that of SCHF and as a result, would have yielded $19,338 more on a $10,000 investment. Thus, ITOT outperformed SCHF by 8.16% annually.
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