The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the Schwab U.S. Large-Cap Growth ETF (SCHG) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and SCHG is a Schwab ETFs Large Growth fund. So, what’s the difference between ITOT and SCHG? And which fund is better?
The expense ratio of ITOT is 0.01 percentage points lower than SCHG’s (0.03% vs. 0.04%). ITOT also has a lower exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided lower returns than SCHG over the past ten years.
In this article, we’ll compare ITOT vs. SCHG. We’ll look at fund composition and risk metrics, as well as at their portfolio growth and industry exposure. Moreover, I’ll also discuss ITOT’s and SCHG’s performance, holdings, and annual returns and examine how these affect their overall returns.
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Summary
| ITOT | SCHG | |
| Name | iShares Core S&P Total U.S. Stock Market ETF | Schwab U.S. Large-Cap Growth ETF |
| Category | Large Blend | Large Growth |
| Issuer | iShares | Schwab ETFs |
| AUM | 41.97B | 15.16B |
| Avg. Return | 14.59% | 17.81% |
| Div. Yield | 1.2% | 0.43% |
| Expense Ratio | 0.03% | 0.04% |
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. Large-Cap Growth ETF (SCHG) is a Large Growth fund that is issued by Schwab ETFs. It currently has 15.16B total assets under management and has yielded an average annual return of 17.81% over the past 10 years. The fund has a dividend yield of 0.43% with an expense ratio of 0.04%.
ITOT’s dividend yield is 0.77% higher than that of SCHG (1.2% vs. 0.43%). Also, ITOT yielded on average 3.22% less per year over the past decade (14.59% vs. 17.81%). The expense ratio of ITOT is 0.01 percentage points lower than SCHG’s (0.03% vs. 0.04%).
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Fund Composition
Industry Exposure
| ITOT | SCHG | |
| Technology | 24.49% | 39.21% |
| Industrials | 9.21% | 3.01% |
| Energy | 2.51% | 0.2% |
| Communication Services | 10.54% | 17.07% |
| Utilities | 2.35% | 0.0% |
| Healthcare | 13.59% | 12.05% |
| Consumer Defensive | 5.79% | 2.15% |
| Real Estate | 3.67% | 1.64% |
| Financial Services | 13.69% | 7.98% |
| Consumer Cyclical | 11.69% | 15.01% |
| Basic Materials | 2.47% | 1.68% |
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. Large-Cap Growth ETF (SCHG) has the most exposure to the Technology sector at 39.21%. This is followed by Communication Services and Consumer Cyclical at 17.07% and 15.01% respectively. Energy (0.2%), Real Estate (1.64%), and Basic Materials (1.68%) only make up 3.52% of the fund’s total assets.
SCHG’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 2.15%, 3.01%, 7.98%, 12.05%, and 15.01%.
ITOT is 14.72% less exposed to the Technology sector than SCHG (24.49% vs 39.21%). ITOT’s exposure to Financial Services and Healthcare stocks is 5.71% higher and 1.54% higher respectively (13.69% vs. 7.98% and 13.59% vs. 12.05%). In total, Basic Materials, Energy, and Real Estate also make up 5.13% more of the fund’s holdings compared to SCHG (8.65% vs. 3.52%).
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%.
| SCHG Holdings | Weight |
| Apple Inc | 11.49% |
| Microsoft Corp | 10.91% |
| Amazon.com Inc | 7.89% |
| Facebook Inc A | 4.45% |
| Alphabet Inc A | 3.93% |
| Alphabet Inc Class C | 3.82% |
| Tesla Inc | 2.8% |
| NVIDIA Corp | 2.67% |
| Visa Inc Class A | 2.12% |
| UnitedHealth Group Inc | 2.02% |
SCHG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 11.49%, 10.91%, 7.89%, 4.45%, and 3.93%.
Alphabet Inc Class C (3.82%), Tesla Inc (2.8%), and NVIDIA Corp (2.67%) have a slightly smaller but still significant weight. Visa Inc Class A and UnitedHealth Group Inc are also represented in the SCHG’s holdings at 2.12% and 2.02%.
Risk Analysis
| ITOT | SCHG | |
| Mean Return | 1.27 | 1.46 |
| R-squared | 99.4 | 92.92 |
| Std. Deviation | 14.02 | 14.78 |
| Alpha | -0.54 | 1.97 |
| Beta | 1.03 | 1.05 |
| Sharpe Ratio | 1.04 | 1.14 |
| Treynor Ratio | 14.13 | 16.3 |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Sharpe Ratio of 1.04 with a R-squared of 99.4 and a Beta of 1.03. Its Alpha is -0.54 while ITOT’s Treynor Ratio is 14.13. Furthermore, the fund has a Mean Return of 1.27 and a Standard Deviation of 14.02.
The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Standard Deviation of 14.78 with a Alpha of 1.97 and a Mean Return of 1.46. Its Beta is 1.05 while SCHG’s Sharpe Ratio is 1.14. Furthermore, the fund has a Treynor Ratio of 16.3 and a R-squared of 92.92.
ITOT’s Mean Return is 0.19 points lower than that of SCHG and its R-squared is 6.48 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than SCHG. The Alpha and Beta of ITOT are 2.51 points lower and 0.02 points lower than SCHG’s Alpha and Beta.
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Performance
Annual Returns
| Year | ITOT | SCHG |
| 2020 | 20.75% | 39.13% |
| 2019 | 30.87% | 36.21% |
| 2018 | -5.27% | -1.35% |
| 2017 | 21.23% | 28.04% |
| 2016 | 12.59% | 6.76% |
| 2015 | 0.96% | 3.26% |
| 2014 | 13.01% | 15.74% |
| 2013 | 32.67% | 33.96% |
| 2012 | 15.98% | 17.02% |
| 2011 | 1.55% | -0.67% |
| 2010 | 16.15% | 16.83% |
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 2020 was the strongest year for SCHG, returning 39.13% on an annual basis. The poorest year for SCHG in the last ten years was 2018, with a yield of -1.35%. Most years the Schwab U.S. Large-Cap Growth ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 15.74%, 16.83%, and 17.02% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| ITOT | $10,000 | $36,427 | 14.59% |
| SCHG | $10,000 | $47,556 | 17.81% |
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 SCHG, the end total would have been $47,556. This equates to a $37,556 profit over 10 years and a compound annual growth rate (CAGR) of 17.81%.
ITOT’s CAGR is 3.22 percentage points lower than that of SCHG and as a result, would have yielded $11,129 less on a $10,000 investment. Thus, ITOT performed worse than SCHG by 3.22% annually.
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