The iShares S&P 500 Value ETF (IVE) and the Schwab U.S. Small-Cap ETF (SCHA) are both among the Top 100 ETFs. IVE is a iShares Large Value fund and SCHA is a Schwab ETFs Small Blend fund. So, what’s the difference between IVE and SCHA? And which fund is better?

The expense ratio of IVE is 0.14 percentage points higher than SCHA’s (0.18% vs. 0.04%). IVE also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IVE has provided lower returns than SCHA over the past 10 years.

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

Summary

IVESCHA
NameiShares S&P 500 Value ETFSchwab U.S. Small-Cap ETF
CategoryLarge ValueSmall Blend
IssueriSharesSchwab ETFs
AUM22.4B16.51B
Avg. Return11.68%12.62%
Div. Yield1.88%0.98%
Expense Ratio0.18%0.04%

The iShares S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.

The Schwab U.S. Small-Cap ETF (SCHA) is a Small Blend fund that is issued by Schwab ETFs. It currently has 16.51B total assets under management and has yielded an average annual return of 12.62% over the past 10 years. The fund has a dividend yield of 0.98% with an expense ratio of 0.04%.

IVE’s dividend yield is 0.90% higher than that of SCHA (1.88% vs. 0.98%). Also, IVE yielded on average 0.94% less per year over the past decade (11.68% vs. 12.62%). The expense ratio of IVE is 0.14 percentage points higher than SCHA’s (0.18% vs. 0.04%).

Fund Composition

Industry Exposure

IVE vs. SCHA - Industry Exposure

IVESCHA
Technology9.41%14.91%
Industrials12.19%15.37%
Energy5.43%3.35%
Communication Services6.4%3.5%
Utilities4.82%1.83%
Healthcare15.4%16.5%
Consumer Defensive9.23%3.75%
Real Estate4.38%7.83%
Financial Services22.06%14.49%
Consumer Cyclical7.68%14.48%
Basic Materials2.99%3.98%

The iShares S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.

IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.

The Schwab U.S. Small-Cap ETF (SCHA) has the most exposure to the Healthcare sector at 16.5%. This is followed by Industrials and Technology at 15.37% and 14.91% respectively. Energy (3.35%), Communication Services (3.5%), and Consumer Defensive (3.75%) only make up 10.60% of the fund’s total assets.

SCHA’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Technology stocks at 3.98%, 7.83%, 14.48%, 14.49%, and 14.91%.

IVE is 7.57% more exposed to the Financial Services sector than SCHA (22.06% vs 14.49%). IVE’s exposure to Healthcare and Industrials stocks is 1.10% lower and 3.18% lower respectively (15.4% vs. 16.5% and 12.19% vs. 15.37%). In total, Real Estate, Utilities, and Energy also make up 1.62% more of the fund’s holdings compared to SCHA (14.63% vs. 13.01%).

Holdings

IVE - Holdings

IVE HoldingsWeight
Berkshire Hathaway Inc Class B3.05%
JPMorgan Chase & Co2.65%
The Walt Disney Co1.85%
Bank of America Corp1.67%
Johnson & Johnson1.57%
Exxon Mobil Corp1.41%
Pfizer Inc1.38%
Cisco Systems Inc1.35%
Verizon Communications Inc1.33%
Intel Corp1.25%

IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.

Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.

SCHA - Holdings

SCHA HoldingsWeight
AMC Entertainment Holdings Inc Class A0.67%
Caesars Entertainment Inc0.51%
Cloudflare Inc0.48%
NovoCure Ltd0.45%
Plug Power Inc0.41%
10x Genomics Inc Ordinary Shares – Class A0.34%
GameStop Corp Class A0.28%
RH0.27%
Penn National Gaming Inc0.27%
Axon Enterprise Inc0.27%

SCHA’s Top Holdings are AMC Entertainment Holdings Inc Class A, Caesars Entertainment Inc, Cloudflare Inc, NovoCure Ltd, and Plug Power Inc at 0.67%, 0.51%, 0.48%, 0.45%, and 0.41%.

10x Genomics Inc Ordinary Shares – Class A (0.34%), GameStop Corp Class A (0.28%), and RH (0.27%) have a slightly smaller but still significant weight. Penn National Gaming Inc and Axon Enterprise Inc are also represented in the SCHA’s holdings at 0.27% and 0.27%.

Risk Analysis

IVESCHA
Mean Return1.051.14
R-squared92.0882.26
Std. Deviation14.318.68
Alpha-2.9-4.65
Beta1.011.25
Sharpe Ratio0.830.7
Treynor Ratio11.419.62

The iShares S&P 500 Value ETF (IVE) has a Treynor Ratio of 11.41 with a Beta of 1.01 and a Mean Return of 1.05. Its Alpha is -2.9 while IVE’s Sharpe Ratio is 0.83. Furthermore, the fund has a Standard Deviation of 14.3 and a R-squared of 92.08.

The Schwab U.S. Small-Cap ETF (SCHA) has a R-squared of 82.26 with a Alpha of -4.65 and a Beta of 1.25. Its Standard Deviation is 18.68 while SCHA’s Sharpe Ratio is 0.7. Furthermore, the fund has a Treynor Ratio of 9.62 and a Mean Return of 1.14.

IVE’s Mean Return is 0.09 points lower than that of SCHA and its R-squared is 9.82 points higher. With a Standard Deviation of 14.3, IVE is slightly less volatile than SCHA. The Alpha and Beta of IVE are 1.75 points higher and 0.24 points lower than SCHA’s Alpha and Beta.

Performance

Annual Returns

IVE vs. SCHA - Annual Returns

YearIVESCHA
20201.24%19.35%
201931.71%26.54%
2018-9.09%-11.75%
201715.19%15.04%
201617.17%19.88%
2015-3.24%-4.24%
201412.14%6.53%
201331.69%39.59%
201217.45%18.24%
2011-0.63%-2.95%
201014.9%28.31%

IVE had its best year in 2019 with an annual return of 31.71%. IVE’s worst year over the past decade yielded -9.09% and occurred in 2018. In most years the iShares S&P 500 Value ETF provided moderate returns such as in 2014, 2010, and 2017 where annual returns amounted to 12.14%, 14.9%, and 15.19% respectively.

The year 2013 was the strongest year for SCHA, returning 39.59% on an annual basis. The poorest year for SCHA in the last ten years was 2018, with a yield of -11.75%. Most years the Schwab U.S. Small-Cap ETF has given investors modest returns, such as in 2017, 2012, and 2020, when gains were 15.04%, 18.24%, and 19.35% respectively.

Portfolio Growth

IVE vs. SCHA - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IVE$10,000$27,28511.68%
SCHA$10,000$30,03512.62%

A $10,000 investment in IVE would have resulted in a final balance of $27,285. This is a profit of $17,285 over 10 years and amounts to a compound annual growth rate (CAGR) of 11.68%.

With a $10,000 investment in SCHA, the end total would have been $30,035. This equates to a $20,035 profit over 10 years and a compound annual growth rate (CAGR) of 12.62%.

IVE’s CAGR is 0.94 percentage points lower than that of SCHA and as a result, would have yielded $2,750 less on a $10,000 investment. Thus, IVE performed worse than SCHA by 0.94% annually.

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