The iShares S&P 500 Growth ETF (IVW) and the Schwab U.S. Large-Cap ETF (SCHX) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and SCHX is a Schwab ETFs Large Blend fund. So, what’s the difference between IVW and SCHX? And which fund is better?
The expense ratio of IVW is 0.15 percentage points higher than SCHX’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 SCHX over the past ten years.
In this article, we’ll compare IVW vs. SCHX. We’ll look at annual returns and industry exposure, as well as at their portfolio growth and performance. Moreover, I’ll also discuss IVW’s and SCHX’s holdings, risk metrics, and fund composition and examine how these affect their overall returns.
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Summary
| IVW | SCHX | |
| Name | iShares S&P 500 Growth ETF | Schwab U.S. Large-Cap ETF |
| Category | Large Growth | Large Blend |
| Issuer | iShares | Schwab ETFs |
| AUM | 35.72B | 30.89B |
| Avg. Return | 16.74% | 14.60% |
| Div. Yield | 0.61% | 1.41% |
| 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. Large-Cap ETF (SCHX) is a Large Blend fund that is issued by Schwab ETFs. It currently has 30.89B total assets under management and has yielded an average annual return of 14.60% over the past 10 years. The fund has a dividend yield of 1.41% with an expense ratio of 0.03%.
IVW’s dividend yield is 0.80% lower than that of SCHX (0.61% vs. 1.41%). Also, IVW yielded on average 2.13% more per year over the past decade (16.74% vs. 14.60%). The expense ratio of IVW is 0.15 percentage points higher than SCHX’s (0.18% vs. 0.03%).
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Fund Composition
Industry Exposure
| IVW | SCHX | |
| Technology | 37.8% | 25.13% |
| Industrials | 5.72% | 8.65% |
| Energy | 0.06% | 2.72% |
| Communication Services | 15.44% | 11.26% |
| Utilities | 0.47% | 2.37% |
| Healthcare | 11.88% | 13.04% |
| Consumer Defensive | 3.84% | 5.97% |
| Real Estate | 1.11% | 3.13% |
| Financial Services | 6.78% | 13.82% |
| Consumer Cyclical | 15.25% | 11.63% |
| Basic Materials | 1.65% | 2.28% |
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 ETF (SCHX) has the most exposure to the Technology sector at 25.13%. This is followed by Financial Services and Healthcare at 13.82% and 13.04% respectively. Utilities (2.37%), Energy (2.72%), and Real Estate (3.13%) only make up 8.22% of the fund’s total assets.
SCHX’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.65%, 11.26%, 11.63%, and 13.04%.
IVW is 12.67% more exposed to the Technology sector than SCHX (37.8% vs 25.13%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 4.18% higher and 3.62% higher respectively (15.44% vs. 11.26% and 15.25% vs. 11.63%). In total, Utilities, Real Estate, and Basic Materials also make up 4.55% less of the fund’s holdings compared to SCHX (3.23% vs. 7.78%).
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%.
| SCHX Holdings | Weight |
| Apple Inc | 5.37% |
| Microsoft Corp | 5.1% |
| Amazon.com Inc | 3.69% |
| Facebook Inc A | 2.08% |
| Alphabet Inc A | 1.84% |
| Alphabet Inc Class C | 1.78% |
| Berkshire Hathaway Inc Class B | 1.32% |
| Tesla Inc | 1.31% |
| NVIDIA Corp | 1.25% |
| JPMorgan Chase & Co | 1.18% |
SCHX’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 5.37%, 5.1%, 3.69%, 2.08%, and 1.84%.
Alphabet Inc Class C (1.78%), Berkshire Hathaway Inc Class B (1.32%), and Tesla Inc (1.31%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHX’s holdings at 1.25% and 1.18%.
Risk Analysis
| IVW | SCHX | |
| Mean Return | 1.44 | 1.24 |
| R-squared | 93.82 | 99.83 |
| Std. Deviation | 13.77 | 13.8 |
| Alpha | 2.19 | -0.14 |
| Beta | 0.98 | 1.02 |
| Sharpe Ratio | 1.21 | 1.03 |
| Treynor Ratio | 17.24 | 14.06 |
The iShares S&P 500 Growth ETF (IVW) has a Alpha of 2.19 with a Treynor Ratio of 17.24 and a Sharpe Ratio of 1.21. Its R-squared is 93.82 while IVW’s Standard Deviation is 13.77. Furthermore, the fund has a Beta of 0.98 and a Mean Return of 1.44.
The Schwab U.S. Large-Cap ETF (SCHX) has a Alpha of -0.14 with a Sharpe Ratio of 1.03 and a Mean Return of 1.24. Its Treynor Ratio is 14.06 while SCHX’s Beta is 1.02. Furthermore, the fund has a R-squared of 99.83 and a Standard Deviation of 13.8.
IVW’s Mean Return is 0.20 points higher than that of SCHX and its R-squared is 6.01 points lower. With a Standard Deviation of 13.77, IVW is slightly less volatile than SCHX. The Alpha and Beta of IVW are 2.33 points higher and 0.04 points lower than SCHX’s Alpha and Beta.
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Performance
Annual Returns
| Year | IVW | SCHX |
| 2020 | 33.21% | 20.9% |
| 2019 | 30.91% | 31.4% |
| 2018 | -0.17% | -4.52% |
| 2017 | 27.2% | 21.91% |
| 2016 | 6.74% | 11.78% |
| 2015 | 5.33% | 1.02% |
| 2014 | 14.67% | 13.33% |
| 2013 | 32.48% | 32.54% |
| 2012 | 14.39% | 16.06% |
| 2011 | 4.49% | 1.61% |
| 2010 | 14.84% | 15.88% |
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 SCHX, returning 32.54% on an annual basis. The poorest year for SCHX in the last ten years was 2018, with a yield of -4.52%. Most years the Schwab U.S. Large-Cap ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.33%, 15.88%, and 16.06% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IVW | $10,000 | $45,206 | 16.74% |
| SCHX | $10,000 | $36,987 | 14.60% |
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 SCHX, the end total would have been $36,987. This equates to a $26,987 profit over 10 years and a compound annual growth rate (CAGR) of 14.60%.
IVW’s CAGR is 2.13 percentage points higher than that of SCHX and as a result, would have yielded $8,219 more on a $10,000 investment. Thus, IVW outperformed SCHX by 2.13% annually.
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