IVW vs. SCHB: What’s The Difference?

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

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

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

Summary

IVW SCHB
Name iShares S&P 500 Growth ETF Schwab U.S. Broad Market ETF
Category Large Growth Large Blend
Issuer iShares Schwab ETFs
AUM 35.72B 21.44B
Avg. Return 16.74% 14.43%
Div. Yield 0.61% 1.39%
Expense Ratio 0.18% 0.03%

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. 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%.

IVW’s dividend yield is 0.78% lower than that of SCHB (0.61% vs. 1.39%). Also, IVW yielded on average 2.30% more per year over the past decade (16.74% vs. 14.43%). The expense ratio of IVW is 0.15 percentage points higher than SCHB’s (0.18% vs. 0.03%).

Fund Composition

Industry Exposure

IVW vs. SCHB - Industry Exposure

IVW SCHB
Technology 37.8% 24.15%
Industrials 5.72% 9.29%
Energy 0.06% 2.78%
Communication Services 15.44% 10.52%
Utilities 0.47% 2.32%
Healthcare 11.88% 13.37%
Consumer Defensive 3.84% 5.76%
Real Estate 1.11% 3.58%
Financial Services 6.78% 13.88%
Consumer Cyclical 15.25% 11.9%
Basic Materials 1.65% 2.45%

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. 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%.

IVW is 13.65% more exposed to the Technology sector than SCHB (37.8% vs 24.15%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 4.92% higher and 3.35% higher respectively (15.44% vs. 10.52% and 15.25% vs. 11.9%). In total, Utilities, Real Estate, and Basic Materials also make up 5.12% less of the fund’s holdings compared to SCHB (3.23% vs. 8.35%).

Holdings

IVW - Holdings

IVW Holdings Weight
Apple Inc 11.46%
Microsoft Corp 10.75%
Amazon.com Inc 7.14%
Facebook Inc Class A 4.28%
Alphabet Inc Class A 4.06%
Alphabet Inc Class C 3.86%
Tesla Inc 2.65%
NVIDIA Corp 2.43%
PayPal Holdings Inc 1.62%
Adobe Inc 1.49%

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%.

SCHB - Holdings

SCHB Holdings Weight
Apple Inc 4.86%
Microsoft Corp 4.61%
Amazon.com Inc 3.33%
Facebook Inc A 1.88%
Alphabet Inc A 1.66%
Alphabet Inc Class C 1.61%
Berkshire Hathaway Inc Class B 1.19%
Tesla Inc 1.18%
NVIDIA Corp 1.13%
JPMorgan Chase & Co 1.06%

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%.

Risk Analysis

IVW SCHB
Mean Return 1.44 1.23
R-squared 93.82 99.33
Std. Deviation 13.77 14.12
Alpha 2.19 -0.58
Beta 0.98 1.04
Sharpe Ratio 1.21 1
Treynor Ratio 17.24 13.58

The iShares S&P 500 Growth ETF (IVW) has a Mean Return of 1.44 with a Alpha of 2.19 and a Standard Deviation of 13.77. Its Sharpe Ratio is 1.21 while IVW’s R-squared is 93.82. Furthermore, the fund has a Beta of 0.98 and a Treynor Ratio of 17.24.

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

IVW’s Mean Return is 0.21 points higher than that of SCHB and its R-squared is 5.51 points lower. With a Standard Deviation of 13.77, IVW is slightly less volatile than SCHB. The Alpha and Beta of IVW are 2.77 points higher and 0.06 points lower than SCHB’s Alpha and Beta.

Performance

Annual Returns

IVW vs. SCHB - Annual Returns

Year IVW SCHB
2020 33.21% 20.77%
2019 30.91% 30.94%
2018 -0.17% -5.25%
2017 27.2% 21.18%
2016 6.74% 12.56%
2015 5.33% 0.45%
2014 14.67% 12.67%
2013 32.48% 33.37%
2012 14.39% 16.22%
2011 4.49% 1.4%
2010 14.84% 17.1%

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 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

IVW vs. SCHB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IVW $10,000 $45,206 16.74%
SCHB $10,000 $36,354 14.43%

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 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%.

IVW’s CAGR is 2.30 percentage points higher than that of SCHB and as a result, would have yielded $8,852 more on a $10,000 investment. Thus, IVW outperformed SCHB by 2.30% annually.


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