IVW vs. SCHG: What’s The Difference?

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

The expense ratio of IVW is 0.14 percentage points higher than SCHG’s (0.18% vs. 0.04%). IVW also has a lower exposure to the technology sector and a lower standard deviation. Overall, IVW has provided lower returns than SCHG over the past ten years.

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

Summary

IVW SCHG
Name iShares S&P 500 Growth ETF Schwab U.S. Large-Cap Growth ETF
Category Large Growth Large Growth
Issuer iShares Schwab ETFs
AUM 35.72B 15.16B
Avg. Return 16.74% 17.81%
Div. Yield 0.61% 0.43%
Expense Ratio 0.18% 0.04%

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. Large-Cap Growth ETF (SCHG) is a Large Growth fund that is issued by Schwab ETFs. It currently has 15.16B total assets under management and has yielded an average annual return of 17.81% over the past 10 years. The fund has a dividend yield of 0.43% with an expense ratio of 0.04%.

IVW’s dividend yield is 0.18% higher than that of SCHG (0.61% vs. 0.43%). Also, IVW yielded on average 1.07% less per year over the past decade (16.74% vs. 17.81%). The expense ratio of IVW is 0.14 percentage points higher than SCHG’s (0.18% vs. 0.04%).

Fund Composition

Industry Exposure

IVW vs. SCHG - Industry Exposure

IVW SCHG
Technology 37.8% 39.21%
Industrials 5.72% 3.01%
Energy 0.06% 0.2%
Communication Services 15.44% 17.07%
Utilities 0.47% 0.0%
Healthcare 11.88% 12.05%
Consumer Defensive 3.84% 2.15%
Real Estate 1.11% 1.64%
Financial Services 6.78% 7.98%
Consumer Cyclical 15.25% 15.01%
Basic Materials 1.65% 1.68%

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. Large-Cap Growth ETF (SCHG) has the most exposure to the Technology sector at 39.21%. This is followed by Communication Services and Consumer Cyclical at 17.07% and 15.01% respectively. Energy (0.2%), Real Estate (1.64%), and Basic Materials (1.68%) only make up 3.52% of the fund’s total assets.

SCHG’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 2.15%, 3.01%, 7.98%, 12.05%, and 15.01%.

IVW is 1.41% less exposed to the Technology sector than SCHG (37.8% vs 39.21%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 1.63% lower and 0.24% higher respectively (15.44% vs. 17.07% and 15.25% vs. 15.01%). In total, Utilities, Real Estate, and Basic Materials also make up 0.09% less of the fund’s holdings compared to SCHG (3.23% vs. 3.32%).

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%.

SCHG - Holdings

SCHG Holdings Weight
Apple Inc 11.49%
Microsoft Corp 10.91%
Amazon.com Inc 7.89%
Facebook Inc A 4.45%
Alphabet Inc A 3.93%
Alphabet Inc Class C 3.82%
Tesla Inc 2.8%
NVIDIA Corp 2.67%
Visa Inc Class A 2.12%
UnitedHealth Group Inc 2.02%

SCHG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 11.49%, 10.91%, 7.89%, 4.45%, and 3.93%.

Alphabet Inc Class C (3.82%), Tesla Inc (2.8%), and NVIDIA Corp (2.67%) have a slightly smaller but still significant weight. Visa Inc Class A and UnitedHealth Group Inc are also represented in the SCHG’s holdings at 2.12% and 2.02%.

Risk Analysis

IVW SCHG
Mean Return 1.44 1.46
R-squared 93.82 92.92
Std. Deviation 13.77 14.78
Alpha 2.19 1.97
Beta 0.98 1.05
Sharpe Ratio 1.21 1.14
Treynor Ratio 17.24 16.3

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

The Schwab U.S. Large-Cap Growth ETF (SCHG) has a R-squared of 92.92 with a Treynor Ratio of 16.3 and a Beta of 1.05. Its Standard Deviation is 14.78 while SCHG’s Sharpe Ratio is 1.14. Furthermore, the fund has a Mean Return of 1.46 and a Alpha of 1.97.

IVW’s Mean Return is 0.02 points lower than that of SCHG and its R-squared is 0.90 points higher. With a Standard Deviation of 13.77, IVW is slightly less volatile than SCHG. The Alpha and Beta of IVW are 0.22 points higher and 0.07 points lower than SCHG’s Alpha and Beta.

Performance

Annual Returns

IVW vs. SCHG - Annual Returns

Year IVW SCHG
2020 33.21% 39.13%
2019 30.91% 36.21%
2018 -0.17% -1.35%
2017 27.2% 28.04%
2016 6.74% 6.76%
2015 5.33% 3.26%
2014 14.67% 15.74%
2013 32.48% 33.96%
2012 14.39% 17.02%
2011 4.49% -0.67%
2010 14.84% 16.83%

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 2020 was the strongest year for SCHG, returning 39.13% on an annual basis. The poorest year for SCHG in the last ten years was 2018, with a yield of -1.35%. Most years the Schwab U.S. Large-Cap Growth ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 15.74%, 16.83%, and 17.02% respectively.

Portfolio Growth

IVW vs. SCHG - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IVW $10,000 $45,206 16.74%
SCHG $10,000 $47,556 17.81%

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 SCHG, the end total would have been $47,556. This equates to a $37,556 profit over 10 years and a compound annual growth rate (CAGR) of 17.81%.

IVW’s CAGR is 1.07 percentage points lower than that of SCHG and as a result, would have yielded $2,350 less on a $10,000 investment. Thus, IVW performed worse than SCHG by 1.07% annually.


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