The iShares S&P 500 Growth ETF (IVW) and the Schwab U.S. Small-Cap ETF (SCHA) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and SCHA is a Schwab ETFs Small Blend fund. So, what’s the difference between IVW and SCHA? And which fund is better?
The expense ratio of IVW is 0.14 percentage points higher than SCHA’s (0.18% vs. 0.04%). IVW also has a higher exposure to the technology sector and a lower standard deviation. Overall, IVW has provided higher returns than SCHA over the past ten years.
In this article, we’ll compare IVW vs. SCHA. We’ll look at holdings and performance, as well as at their risk metrics and annual returns. Moreover, I’ll also discuss IVW’s and SCHA’s fund composition, industry exposure, and portfolio growth and examine how these affect their overall returns.
|Name||iShares S&P 500 Growth ETF||Schwab U.S. Small-Cap ETF|
|Category||Large Growth||Small Blend|
The iShares S&P 500 Growth ETF (IVW) is a Large Growth fund that is issued by iShares. It currently has 35.72B total assets under management and has yielded an average annual return of 16.74% over the past 10 years. The fund has a dividend yield of 0.61% 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%.
IVW’s dividend yield is 0.37% lower than that of SCHA (0.61% vs. 0.98%). Also, IVW yielded on average 4.11% more per year over the past decade (16.74% vs. 12.62%). The expense ratio of IVW is 0.14 percentage points higher than SCHA’s (0.18% vs. 0.04%).
The iShares S&P 500 Growth ETF (IVW) has the most exposure to the Technology sector at 37.8%. This is followed by Communication Services and Consumer Cyclical at 15.44% and 15.25% respectively. Utilities (0.47%), Real Estate (1.11%), and Basic Materials (1.65%) only make up 3.23% of the fund’s total assets.
IVW’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 3.84%, 5.72%, 6.78%, 11.88%, and 15.25%.
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%.
IVW is 22.89% more exposed to the Technology sector than SCHA (37.8% vs 14.91%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 11.94% higher and 0.77% higher respectively (15.44% vs. 3.5% and 15.25% vs. 14.48%). In total, Utilities, Real Estate, and Basic Materials also make up 10.41% less of the fund’s holdings compared to SCHA (3.23% vs. 13.64%).
|Facebook Inc Class A||4.28%|
|Alphabet Inc Class A||4.06%|
|Alphabet Inc Class C||3.86%|
|PayPal Holdings Inc||1.62%|
IVW’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 11.46%, 10.75%, 7.14%, 4.28%, and 4.06%.
Alphabet Inc Class C (3.86%), Tesla Inc (2.65%), and NVIDIA Corp (2.43%) have a slightly smaller but still significant weight. PayPal Holdings Inc and Adobe Inc are also represented in the IVW’s holdings at 1.62% and 1.49%.
|AMC Entertainment Holdings Inc Class A||0.67%|
|Caesars Entertainment Inc||0.51%|
|Plug Power Inc||0.41%|
|10x Genomics Inc Ordinary Shares – Class A||0.34%|
|GameStop Corp Class A||0.28%|
|Penn National Gaming Inc||0.27%|
|Axon Enterprise Inc||0.27%|
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%.
The iShares S&P 500 Growth ETF (IVW) has a Treynor Ratio of 17.24 with a Standard Deviation of 13.77 and a R-squared of 93.82. Its Alpha is 2.19 while IVW’s Beta is 0.98. Furthermore, the fund has a Mean Return of 1.44 and a Sharpe Ratio of 1.21.
The Schwab U.S. Small-Cap ETF (SCHA) has a Sharpe Ratio of 0.7 with a Treynor Ratio of 9.62 and a Standard Deviation of 18.68. Its Mean Return is 1.14 while SCHA’s Alpha is -4.65. Furthermore, the fund has a R-squared of 82.26 and a Beta of 1.25.
IVW’s Mean Return is 0.30 points higher than that of SCHA and its R-squared is 11.56 points higher. With a Standard Deviation of 13.77, IVW is slightly less volatile than SCHA. The Alpha and Beta of IVW are 6.84 points higher and 0.27 points lower than SCHA’s Alpha and Beta.
IVW had its best year in 2020 with an annual return of 33.21%. IVW’s worst year over the past decade yielded -0.17% and occurred in 2018. In most years the iShares S&P 500 Growth ETF provided moderate returns such as in 2012, 2014, and 2010 where annual returns amounted to 14.39%, 14.67%, and 14.84% 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IVW would have resulted in a final balance of $45,206. This is a profit of $35,206 over 10 years and amounts to a compound annual growth rate (CAGR) of 16.74%.
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%.
IVW’s CAGR is 4.11 percentage points higher than that of SCHA and as a result, would have yielded $15,171 more on a $10,000 investment. Thus, IVW outperformed SCHA by 4.11% annually.
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