The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the Schwab U.S. Large-Cap ETF (SCHX) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and SCHX is a Schwab ETFs Large Blend fund. So, what’s the difference between ITOT and SCHX? And which fund is better?
ITOT and SCHX have the same expense ratio: 0.03%. ITOT also has a lower exposure to the technology sector and a higher standard deviation. Overall, ITOT has provided lower returns than SCHX over the past ten years.
In this article, we’ll compare ITOT vs. SCHX. We’ll look at portfolio growth and fund composition, as well as at their performance and industry exposure. Moreover, I’ll also discuss ITOT’s and SCHX’s holdings, risk metrics, and annual returns and examine how these affect their overall returns.
Summary
| ITOT | SCHX | |
| Name | iShares Core S&P Total U.S. Stock Market ETF | Schwab U.S. Large-Cap ETF |
| Category | Large Blend | Large Blend |
| Issuer | iShares | Schwab ETFs |
| AUM | 41.97B | 30.89B |
| Avg. Return | 14.59% | 14.60% |
| Div. Yield | 1.2% | 1.41% |
| Expense Ratio | 0.03% | 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. Large-Cap ETF (SCHX) is a Large Blend fund that is issued by Schwab ETFs. It currently has 30.89B total assets under management and has yielded an average annual return of 14.60% over the past 10 years. The fund has a dividend yield of 1.41% with an expense ratio of 0.03%.
ITOT’s dividend yield is 0.21% lower than that of SCHX (1.2% vs. 1.41%). Also, ITOT yielded on average 0.01% less per year over the past decade (14.59% vs. 14.60%). ITOT and SCHX have the same expense ratio: 0.03%.
Fund Composition
Industry Exposure
| ITOT | SCHX | |
| Technology | 24.49% | 25.13% |
| Industrials | 9.21% | 8.65% |
| Energy | 2.51% | 2.72% |
| Communication Services | 10.54% | 11.26% |
| Utilities | 2.35% | 2.37% |
| Healthcare | 13.59% | 13.04% |
| Consumer Defensive | 5.79% | 5.97% |
| Real Estate | 3.67% | 3.13% |
| Financial Services | 13.69% | 13.82% |
| Consumer Cyclical | 11.69% | 11.63% |
| Basic Materials | 2.47% | 2.28% |
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 ETF (SCHX) has the most exposure to the Technology sector at 25.13%. This is followed by Financial Services and Healthcare at 13.82% and 13.04% respectively. Utilities (2.37%), Energy (2.72%), and Real Estate (3.13%) only make up 8.22% of the fund’s total assets.
SCHX’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.65%, 11.26%, 11.63%, and 13.04%.
ITOT is 0.64% less exposed to the Technology sector than SCHX (24.49% vs 25.13%). ITOT’s exposure to Financial Services and Healthcare stocks is 0.13% lower and 0.55% higher respectively (13.69% vs. 13.82% and 13.59% vs. 13.04%). In total, Basic Materials, Energy, and Real Estate also make up 0.52% more of the fund’s holdings compared to SCHX (8.65% vs. 8.13%).
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%.
| SCHX Holdings | Weight |
| Apple Inc | 5.37% |
| Microsoft Corp | 5.1% |
| Amazon.com Inc | 3.69% |
| Facebook Inc A | 2.08% |
| Alphabet Inc A | 1.84% |
| Alphabet Inc Class C | 1.78% |
| Berkshire Hathaway Inc Class B | 1.32% |
| Tesla Inc | 1.31% |
| NVIDIA Corp | 1.25% |
| JPMorgan Chase & Co | 1.18% |
SCHX’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 5.37%, 5.1%, 3.69%, 2.08%, and 1.84%.
Alphabet Inc Class C (1.78%), Berkshire Hathaway Inc Class B (1.32%), and Tesla Inc (1.31%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHX’s holdings at 1.25% and 1.18%.
Risk Analysis
| ITOT | SCHX | |
| Mean Return | 1.27 | 1.24 |
| R-squared | 99.4 | 99.83 |
| Std. Deviation | 14.02 | 13.8 |
| Alpha | -0.54 | -0.14 |
| Beta | 1.03 | 1.02 |
| Sharpe Ratio | 1.04 | 1.03 |
| Treynor Ratio | 14.13 | 14.06 |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Beta of 1.03 with a Mean Return of 1.27 and a Standard Deviation of 14.02. Its Treynor Ratio is 14.13 while ITOT’s Alpha is -0.54. Furthermore, the fund has a Sharpe Ratio of 1.04 and a R-squared of 99.4.
The Schwab U.S. Large-Cap ETF (SCHX) has a Mean Return of 1.24 with a Alpha of -0.14 and a Beta of 1.02. Its Treynor Ratio is 14.06 while SCHX’s Sharpe Ratio is 1.03. Furthermore, the fund has a R-squared of 99.83 and a Standard Deviation of 13.8.
ITOT’s Mean Return is 0.03 points higher than that of SCHX and its R-squared is 0.43 points lower. With a Standard Deviation of 14.02, ITOT is slightly more volatile than SCHX. The Alpha and Beta of ITOT are 0.40 points lower and 0.01 points higher than SCHX’s Alpha and Beta.
Performance
Annual Returns
| Year | ITOT | SCHX |
| 2020 | 20.75% | 20.9% |
| 2019 | 30.87% | 31.4% |
| 2018 | -5.27% | -4.52% |
| 2017 | 21.23% | 21.91% |
| 2016 | 12.59% | 11.78% |
| 2015 | 0.96% | 1.02% |
| 2014 | 13.01% | 13.33% |
| 2013 | 32.67% | 32.54% |
| 2012 | 15.98% | 16.06% |
| 2011 | 1.55% | 1.61% |
| 2010 | 16.15% | 15.88% |
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 SCHX, returning 32.54% on an annual basis. The poorest year for SCHX in the last ten years was 2018, with a yield of -4.52%. Most years the Schwab U.S. Large-Cap ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.33%, 15.88%, and 16.06% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| ITOT | $10,000 | $36,427 | 14.59% |
| SCHX | $10,000 | $36,987 | 14.60% |
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 SCHX, the end total would have been $36,987. This equates to a $26,987 profit over 10 years and a compound annual growth rate (CAGR) of 14.60%.
ITOT’s CAGR is 0.01 percentage points lower than that of SCHX and as a result, would have yielded $560 less on a $10,000 investment. Thus, ITOT performed worse than SCHX by 0.01% annually.
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