The iShares S&P 500 Value ETF (IVE) and the Schwab U.S. TIPS ETF (SCHP) are both among the Top 100 ETFs. IVE is a iShares Large Value fund and SCHP is a Schwab ETFs Inflation-Protected Bond fund. So, what’s the difference between IVE and SCHP? And which fund is better?
The expense ratio of IVE is 0.13 percentage points higher than SCHP’s (0.18% vs. 0.05%). IVE also has a high exposure to the financial services sector while SCHP is mostly comprised of AAA bonds. Overall, IVE has provided higher returns than SCHP over the past 10 years.
In this article, we’ll compare IVE vs. SCHP. We’ll look at holdings and performance, as well as at their fund composition and portfolio growth. Moreover, I’ll also discuss IVE’s and SCHP’s industry exposure, annual returns, and risk metrics and examine how these affect their overall returns.
|Name||iShares S&P 500 Value ETF||Schwab U.S. TIPS ETF|
|Category||Large Value||Inflation-Protected Bond|
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. TIPS ETF (SCHP) is a Inflation-Protected Bond fund that is issued by Schwab ETFs. It currently has 18.41B total assets under management and has yielded an average annual return of 3.92% over the past 10 years. The fund has a dividend yield of 1.97% with an expense ratio of 0.05%.
IVE’s dividend yield is 0.09% lower than that of SCHP (1.88% vs. 1.97%). Also, IVE yielded on average 7.77% more per year over the past decade (11.68% vs. 3.92%). The expense ratio of IVE is 0.13 percentage points higher than SCHP’s (0.18% vs. 0.05%).
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|Berkshire Hathaway Inc Class B||3.05%|
|JPMorgan Chase & Co||2.65%|
|The Walt Disney Co||1.85%|
|Bank of America Corp||1.67%|
|Johnson & Johnson||1.57%|
|Exxon Mobil Corp||1.41%|
|Cisco Systems Inc||1.35%|
|Verizon Communications Inc||1.33%|
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%.
|SCHP Bond Sectors||Weight|
SCHP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
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The iShares S&P 500 Value ETF (IVE) has a Sharpe Ratio of 0.83 with a Beta of 1.01 and a Mean Return of 1.05. Its Treynor Ratio is 11.41 while IVE’s Alpha is -2.9. Furthermore, the fund has a R-squared of 92.08 and a Standard Deviation of 14.3.
The Schwab U.S. TIPS ETF (SCHP) has a Treynor Ratio of 2.31 with a Beta of 1.17 and a Mean Return of 0.28. Its Standard Deviation is 4.32 while SCHP’s Alpha is -0.5. Furthermore, the fund has a Sharpe Ratio of 0.64 and a R-squared of 66.16.
IVE’s Mean Return is 0.77 points higher than that of SCHP and its R-squared is 25.92 points higher. With a Standard Deviation of 14.3, IVE is slightly more volatile than SCHP. The Alpha and Beta of IVE are 2.40 points lower and 0.16 points lower than SCHP’s Alpha and Beta.
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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 2011 was the strongest year for SCHP, returning 13.38% on an annual basis. The poorest year for SCHP in the last ten years was 2013, with a yield of -8.66%. Most years the Schwab U.S. TIPS ETF has given investors modest returns, such as in 2017, 2014, and 2016, when gains were 2.95%, 3.56%, and 4.6% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 SCHP, the end total would have been $14,418. This equates to a $4,418 profit over 10 years and a compound annual growth rate (CAGR) of 3.92%.
IVE’s CAGR is 7.77 percentage points higher than that of SCHP and as a result, would have yielded $12,867 more on a $10,000 investment. Thus, IVE outperformed SCHP by 7.77% annually.
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