The iShares S&P 500 Growth ETF (IVW) and the Schwab U.S. TIPS ETF (SCHP) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and SCHP is a Schwab ETFs Inflation-Protected Bond fund. So, what’s the difference between IVW and SCHP? And which fund is better?
The expense ratio of IVW is 0.13 percentage points higher than SCHP’s (0.18% vs. 0.05%). IVW also has a high exposure to the technology sector while SCHP is mostly comprised of AAA bonds. Overall, IVW has provided higher returns than SCHP over the past ten years.
In this article, we’ll compare IVW vs. SCHP. We’ll look at fund composition and portfolio growth, as well as at their holdings and risk metrics. Moreover, I’ll also discuss IVW’s and SCHP’s annual returns, industry exposure, and performance and examine how these affect their overall returns.
|Name||iShares S&P 500 Growth ETF||Schwab U.S. TIPS ETF|
|Category||Large Growth||Inflation-Protected Bond|
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. 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%.
IVW’s dividend yield is 1.36% lower than that of SCHP (0.61% vs. 1.97%). Also, IVW yielded on average 12.82% more per year over the past decade (16.74% vs. 3.92%). The expense ratio of IVW is 0.13 percentage points higher than SCHP’s (0.18% vs. 0.05%).
FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).
|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%.
|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.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
The iShares S&P 500 Growth ETF (IVW) has a Treynor Ratio of 17.24 with a Alpha of 2.19 and a Beta of 0.98. Its R-squared is 93.82 while IVW’s Sharpe Ratio is 1.21. Furthermore, the fund has a Mean Return of 1.44 and a Standard Deviation of 13.77.
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 Alpha is -0.5 while SCHP’s R-squared is 66.16. Furthermore, the fund has a Standard Deviation of 4.32 and a Sharpe Ratio of 0.64.
IVW’s Mean Return is 1.16 points higher than that of SCHP and its R-squared is 27.66 points higher. With a Standard Deviation of 13.77, IVW is slightly more volatile than SCHP. The Alpha and Beta of IVW are 2.69 points higher and 0.19 points lower than SCHP’s Alpha and Beta.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
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 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 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 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%.
IVW’s CAGR is 12.82 percentage points higher than that of SCHP and as a result, would have yielded $30,788 more on a $10,000 investment. Thus, IVW outperformed SCHP by 12.82% 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.