The iShares S&P 500 Growth ETF (IVW) and the Schwab U.S. Dividend Equity ETF (SCHD) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and SCHD is a Schwab ETFs Large Value fund. So, what’s the difference between IVW and SCHD? And which fund is better?
The expense ratio of IVW is 0.12 percentage points higher than SCHD’s (0.18% vs. 0.06%). IVW also has a higher exposure to the technology sector and a higher standard deviation. Overall, IVW has provided higher returns than SCHD over the past ten years.
In this article, we’ll compare IVW vs. SCHD. We’ll look at annual returns and holdings, as well as at their risk metrics and portfolio growth. Moreover, I’ll also discuss IVW’s and SCHD’s performance, industry exposure, and fund composition and examine how these affect their overall returns.
|Name||iShares S&P 500 Growth ETF||Schwab U.S. Dividend Equity ETF|
|Category||Large Growth||Large Value|
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. Dividend Equity ETF (SCHD) is a Large Value fund that is issued by Schwab ETFs. It currently has 26B total assets under management and has yielded an average annual return of 14.80% over the past 10 years. The fund has a dividend yield of 2.89% with an expense ratio of 0.06%.
IVW’s dividend yield is 2.28% lower than that of SCHD (0.61% vs. 2.89%). Also, IVW yielded on average 1.93% more per year over the past decade (16.74% vs. 14.80%). The expense ratio of IVW is 0.12 percentage points higher than SCHD’s (0.18% vs. 0.06%).
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. Dividend Equity ETF (SCHD) has the most exposure to the Financial Services sector at 21.69%. This is followed by Industrials and Technology at 18.05% and 16.26% respectively. Utilities (0.0%), Energy (1.87%), and Basic Materials (2.13%) only make up 4.00% of the fund’s total assets.
SCHD’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Healthcare, Consumer Defensive, and Technology stocks at 4.96%, 8.36%, 12.64%, 14.04%, and 16.26%.
IVW is 21.54% more exposed to the Technology sector than SCHD (37.8% vs 16.26%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 10.48% higher and 6.89% higher respectively (15.44% vs. 4.96% and 15.25% vs. 8.36%). In total, Utilities, Real Estate, and Basic Materials also make up 1.10% more of the fund’s holdings compared to SCHD (3.23% vs. 2.13%).
|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%.
|Merck & Co Inc||4.24%|
|The Home Depot Inc||4.19%|
|Texas Instruments Inc||4.16%|
|Verizon Communications Inc||3.96%|
|Cisco Systems Inc||3.96%|
SCHD’s Top Holdings are Merck & Co Inc, The Home Depot Inc, Texas Instruments Inc, Broadcom Inc, and Amgen Inc at 4.24%, 4.19%, 4.16%, 4.15%, and 4.11%.
PepsiCo Inc (4.09%), BlackRock Inc (4.05%), and Pfizer Inc (3.97%) have a slightly smaller but still significant weight. Verizon Communications Inc and Cisco Systems Inc are also represented in the SCHD’s holdings at 3.96% and 3.96%.
The iShares S&P 500 Growth ETF (IVW) has a Treynor Ratio of 17.24 with a Beta of 0.98 and a Alpha of 2.19. Its R-squared is 93.82 while IVW’s Standard Deviation is 13.77. Furthermore, the fund has a Mean Return of 1.44 and a Sharpe Ratio of 1.21.
The Schwab U.S. Dividend Equity ETF (SCHD) has a Standard Deviation of 0 with a R-squared of 0 and a Alpha of 0. Its Sharpe Ratio is 0 while SCHD’s Treynor Ratio is 0. Furthermore, the fund has a Beta of 0 and a Mean Return of 0.
IVW’s Mean Return is 1.44 points higher than that of SCHD and its R-squared is 93.82 points higher. With a Standard Deviation of 13.77, IVW is slightly more volatile than SCHD. The Alpha and Beta of IVW are 2.19 points higher and 0.98 points higher than SCHD’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 SCHD, returning 32.9% on an annual basis. The poorest year for SCHD in the last ten years was 2018, with a yield of -5.46%. Most years the Schwab U.S. Dividend Equity ETF has given investors modest returns, such as in 2012, 2014, and 2020, when gains were 11.4%, 11.66%, and 15.11% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IVW would have resulted in a final balance of $37,821. This is a profit of $27,821 over 8 years and amounts to a compound annual growth rate (CAGR) of 16.74%.
With a $10,000 investment in SCHD, the end total would have been $28,823. This equates to a $18,823 profit over 8 years and a compound annual growth rate (CAGR) of 14.80%.
IVW’s CAGR is 1.93 percentage points higher than that of SCHD and as a result, would have yielded $8,998 more on a $10,000 investment. Thus, IVW outperformed SCHD by 1.93% annually.
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.