Skip to content

IWB vs. SCHB: What’s The Difference?

The iShares Russell 1000 ETF (IWB) and the Schwab U.S. Broad Market ETF (SCHB) are both among the Top 100 ETFs. IWB is a iShares Large Blend fund and SCHB is a Schwab ETFs Large Blend fund. So, what’s the difference between IWB and SCHB? And which fund is better?

The expense ratio of IWB is 0.12 percentage points higher than SCHB’s (0.15% vs. 0.03%). IWB also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWB has provided higher returns than SCHB over the past ten years.

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

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

IWBSCHB
NameiShares Russell 1000 ETFSchwab U.S. Broad Market ETF
CategoryLarge BlendLarge Blend
IssueriSharesSchwab ETFs
AUM30.54B21.44B
Avg. Return14.64%14.43%
Div. Yield1.14%1.39%
Expense Ratio0.15%0.03%

The iShares Russell 1000 ETF (IWB) is a Large Blend fund that is issued by iShares. It currently has 30.54B total assets under management and has yielded an average annual return of 14.64% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.15%.

The Schwab U.S. Broad Market ETF (SCHB) is a Large Blend fund that is issued by Schwab ETFs. It currently has 21.44B total assets under management and has yielded an average annual return of 14.43% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.03%.

IWB’s dividend yield is 0.25% lower than that of SCHB (1.14% vs. 1.39%). Also, IWB yielded on average 0.20% more per year over the past decade (14.64% vs. 14.43%). The expense ratio of IWB is 0.12 percentage points higher than SCHB’s (0.15% vs. 0.03%).

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).

Fund Composition

Industry Exposure

IWB vs. SCHB - Industry Exposure

IWBSCHB
Technology25.33%24.15%
Industrials8.88%9.29%
Energy2.44%2.78%
Communication Services10.83%10.52%
Utilities2.36%2.32%
Healthcare13.35%13.37%
Consumer Defensive5.97%5.76%
Real Estate3.34%3.58%
Financial Services13.64%13.88%
Consumer Cyclical11.85%11.9%
Basic Materials2.02%2.45%

The iShares Russell 1000 ETF (IWB) has the most exposure to the Technology sector at 25.33%. This is followed by Financial Services and Healthcare at 13.64% and 13.35% respectively. Utilities (2.36%), Energy (2.44%), and Real Estate (3.34%) only make up 8.14% of the fund’s total assets.

IWB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.88%, 10.83%, 11.85%, and 13.35%.

The Schwab U.S. Broad Market ETF (SCHB) has the most exposure to the Technology sector at 24.15%. This is followed by Financial Services and Healthcare at 13.88% and 13.37% respectively. Basic Materials (2.45%), Energy (2.78%), and Real Estate (3.58%) only make up 8.81% of the fund’s total assets.

SCHB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.76%, 9.29%, 10.52%, 11.9%, and 13.37%.

IWB is 1.18% more exposed to the Technology sector than SCHB (25.33% vs 24.15%). IWB’s exposure to Financial Services and Healthcare stocks is 0.24% lower and 0.02% lower respectively (13.64% vs. 13.88% and 13.35% vs. 13.37%). In total, Utilities, Energy, and Real Estate also make up 0.54% less of the fund’s holdings compared to SCHB (8.14% vs. 8.68%).

Holdings

IWB - Holdings

IWB HoldingsWeight
Apple Inc5.45%
Microsoft Corp5.11%
Amazon.com Inc3.43%
Facebook Inc Class A2.03%
Alphabet Inc Class A1.93%
Alphabet Inc Class C1.82%
Tesla Inc1.27%
Berkshire Hathaway Inc Class B1.24%
NVIDIA Corp1.11%
JPMorgan Chase & Co1.09%

IWB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.45%, 5.11%, 3.43%, 2.03%, and 1.93%.

Alphabet Inc Class C (1.82%), Tesla Inc (1.27%), and Berkshire Hathaway Inc Class B (1.24%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the IWB’s holdings at 1.11% and 1.09%.

SCHB - Holdings

SCHB HoldingsWeight
Apple Inc4.86%
Microsoft Corp4.61%
Amazon.com Inc3.33%
Facebook Inc A1.88%
Alphabet Inc A1.66%
Alphabet Inc Class C1.61%
Berkshire Hathaway Inc Class B1.19%
Tesla Inc1.18%
NVIDIA Corp1.13%
JPMorgan Chase & Co1.06%

SCHB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 4.86%, 4.61%, 3.33%, 1.88%, and 1.66%.

Alphabet Inc Class C (1.61%), Berkshire Hathaway Inc Class B (1.19%), and Tesla Inc (1.18%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHB’s holdings at 1.13% and 1.06%.

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).

Risk Analysis

IWBSCHB
Mean Return1.271.23
R-squared99.7399.33
Std. Deviation13.8714.12
Alpha-0.38-0.58
Beta1.021.04
Sharpe Ratio1.051
Treynor Ratio14.3113.58

The iShares Russell 1000 ETF (IWB) has a Mean Return of 1.27 with a R-squared of 99.73 and a Standard Deviation of 13.87. Its Sharpe Ratio is 1.05 while IWB’s Beta is 1.02. Furthermore, the fund has a Alpha of -0.38 and a Treynor Ratio of 14.31.

The Schwab U.S. Broad Market ETF (SCHB) has a Mean Return of 1.23 with a R-squared of 99.33 and a Treynor Ratio of 13.58. Its Beta is 1.04 while SCHB’s Standard Deviation is 14.12. Furthermore, the fund has a Alpha of -0.58 and a Sharpe Ratio of 1.

IWB’s Mean Return is 0.04 points higher than that of SCHB and its R-squared is 0.40 points higher. With a Standard Deviation of 13.87, IWB is slightly less volatile than SCHB. The Alpha and Beta of IWB are 0.20 points higher and 0.02 points lower than SCHB’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!

Performance

Annual Returns

IWB vs. SCHB - Annual Returns

YearIWBSCHB
202020.8%20.77%
201931.26%30.94%
2018-4.91%-5.25%
201721.53%21.18%
201611.91%12.56%
20150.82%0.45%
201413.08%12.67%
201332.93%33.37%
201216.27%16.22%
20111.36%1.4%
201015.94%17.1%

IWB had its best year in 2013 with an annual return of 32.93%. IWB’s worst year over the past decade yielded -4.91% and occurred in 2018. In most years the iShares Russell 1000 ETF provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.08%, 15.94%, and 16.27% respectively.

The year 2013 was the strongest year for SCHB, returning 33.37% on an annual basis. The poorest year for SCHB in the last ten years was 2018, with a yield of -5.25%. Most years the Schwab U.S. Broad Market ETF has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 12.67%, 16.22%, and 17.1% respectively.

Portfolio Growth

IWB vs. SCHB - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IWB$10,000$36,62414.64%
SCHB$10,000$36,35414.43%

A $10,000 investment in IWB would have resulted in a final balance of $36,624. This is a profit of $26,624 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.64%.

With a $10,000 investment in SCHB, the end total would have been $36,354. This equates to a $26,354 profit over 10 years and a compound annual growth rate (CAGR) of 14.43%.

IWB’s CAGR is 0.20 percentage points higher than that of SCHB and as a result, would have yielded $270 more on a $10,000 investment. Thus, IWB outperformed SCHB by 0.20% annually.


Current recommendations:

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.

Leave a Reply

Your email address will not be published.