IVW vs. SCHP: What’s The Difference?

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.

Summary

IVW SCHP
Name iShares S&P 500 Growth ETF Schwab U.S. TIPS ETF
Category Large Growth Inflation-Protected Bond
Issuer iShares Schwab ETFs
AUM 35.72B 18.41B
Avg. Return 16.74% 3.92%
Div. Yield 0.61% 1.97%
Expense Ratio 0.18% 0.05%

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%).

Fund Composition

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%.

SCHP - Holdings

SCHP Bond Sectors Weight
AAA 100.0%
Others 0.0%
Below B 0.0%
B 0.0%
BB 0.0%
BBB 0.0%
A 0.0%
AA 0.0%
US Government 0.0%

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.

Risk Analysis

IVW SCHP
Mean Return 1.44 0.28
R-squared 93.82 66.16
Std. Deviation 13.77 4.32
Alpha 2.19 -0.5
Beta 0.98 1.17
Sharpe Ratio 1.21 0.64
Treynor Ratio 17.24 2.31

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.

Performance

Annual Returns

IVW vs. SCHP - Annual Returns

Year IVW SCHP
2020 33.21% 10.94%
2019 30.91% 8.36%
2018 -0.17% -1.31%
2017 27.2% 2.95%
2016 6.74% 4.6%
2015 5.33% -1.5%
2014 14.67% 3.56%
2013 32.48% -8.66%
2012 14.39% 6.83%
2011 4.49% 13.38%
2010 14.84% 0.0%

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.

Portfolio Growth

IVW vs. SCHP - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IVW $10,000 $45,206 16.74%
SCHP $10,000 $14,418 3.92%

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.


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