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IVE vs. SCHB: What’s The Difference?

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

The expense ratio of IVE is 0.15 percentage points higher than SCHB’s (0.18% vs. 0.03%). IVE also has a higher exposure to the financial services sector and a higher standard deviation. Overall, IVE has provided lower returns than SCHB over the past 10 years.

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

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Summary

IVESCHB
NameiShares S&P 500 Value ETFSchwab U.S. Broad Market ETF
CategoryLarge ValueLarge Blend
IssueriSharesSchwab ETFs
AUM22.4B21.44B
Avg. Return11.68%14.43%
Div. Yield1.88%1.39%
Expense Ratio0.18%0.03%

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. 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%.

IVE’s dividend yield is 0.49% higher than that of SCHB (1.88% vs. 1.39%). Also, IVE yielded on average 2.75% less per year over the past decade (11.68% vs. 14.43%). The expense ratio of IVE is 0.15 percentage points higher than SCHB’s (0.18% vs. 0.03%).

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Fund Composition

Industry Exposure

IVE vs. SCHB - Industry Exposure

IVESCHB
Technology9.41%24.15%
Industrials12.19%9.29%
Energy5.43%2.78%
Communication Services6.4%10.52%
Utilities4.82%2.32%
Healthcare15.4%13.37%
Consumer Defensive9.23%5.76%
Real Estate4.38%3.58%
Financial Services22.06%13.88%
Consumer Cyclical7.68%11.9%
Basic Materials2.99%2.45%

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. 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%.

IVE is 8.18% more exposed to the Financial Services sector than SCHB (22.06% vs 13.88%). IVE’s exposure to Healthcare and Industrials stocks is 2.03% higher and 2.90% higher respectively (15.4% vs. 13.37% and 12.19% vs. 9.29%). In total, Real Estate, Utilities, and Energy also make up 5.95% more of the fund’s holdings compared to SCHB (14.63% vs. 8.68%).

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%.

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

IVESCHB
Mean Return1.051.23
R-squared92.0899.33
Std. Deviation14.314.12
Alpha-2.9-0.58
Beta1.011.04
Sharpe Ratio0.831
Treynor Ratio11.4113.58

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

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

IVE’s Mean Return is 0.18 points lower than that of SCHB and its R-squared is 7.25 points lower. With a Standard Deviation of 14.3, IVE is slightly more volatile than SCHB. The Alpha and Beta of IVE are 2.32 points lower and 0.03 points lower than SCHB’s Alpha and Beta.

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Performance

Annual Returns

IVE vs. SCHB - Annual Returns

YearIVESCHB
20201.24%20.77%
201931.71%30.94%
2018-9.09%-5.25%
201715.19%21.18%
201617.17%12.56%
2015-3.24%0.45%
201412.14%12.67%
201331.69%33.37%
201217.45%16.22%
2011-0.63%1.4%
201014.9%17.1%

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 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

IVE vs. SCHB - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IVE$10,000$27,28511.68%
SCHB$10,000$36,35414.43%

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 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%.

IVE’s CAGR is 2.75 percentage points lower than that of SCHB and as a result, would have yielded $9,069 less on a $10,000 investment. Thus, IVE performed worse than SCHB by 2.75% annually.


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