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.
Summary
| IWB | SCHB | |
| Name | iShares Russell 1000 ETF | Schwab U.S. Broad Market ETF |
| Category | Large Blend | Large Blend |
| Issuer | iShares | Schwab ETFs |
| AUM | 30.54B | 21.44B |
| Avg. Return | 14.64% | 14.43% |
| Div. Yield | 1.14% | 1.39% |
| Expense Ratio | 0.15% | 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%).
Fund Composition
Industry Exposure
| IWB | SCHB | |
| Technology | 25.33% | 24.15% |
| Industrials | 8.88% | 9.29% |
| Energy | 2.44% | 2.78% |
| Communication Services | 10.83% | 10.52% |
| Utilities | 2.36% | 2.32% |
| Healthcare | 13.35% | 13.37% |
| Consumer Defensive | 5.97% | 5.76% |
| Real Estate | 3.34% | 3.58% |
| Financial Services | 13.64% | 13.88% |
| Consumer Cyclical | 11.85% | 11.9% |
| Basic Materials | 2.02% | 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 | Weight |
| Apple Inc | 5.45% |
| Microsoft Corp | 5.11% |
| Amazon.com Inc | 3.43% |
| Facebook Inc Class A | 2.03% |
| Alphabet Inc Class A | 1.93% |
| Alphabet Inc Class C | 1.82% |
| Tesla Inc | 1.27% |
| Berkshire Hathaway Inc Class B | 1.24% |
| NVIDIA Corp | 1.11% |
| JPMorgan Chase & Co | 1.09% |
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 | Weight |
| Apple Inc | 4.86% |
| Microsoft Corp | 4.61% |
| Amazon.com Inc | 3.33% |
| Facebook Inc A | 1.88% |
| Alphabet Inc A | 1.66% |
| Alphabet Inc Class C | 1.61% |
| Berkshire Hathaway Inc Class B | 1.19% |
| Tesla Inc | 1.18% |
| NVIDIA Corp | 1.13% |
| JPMorgan Chase & Co | 1.06% |
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%.
Risk Analysis
| IWB | SCHB | |
| Mean Return | 1.27 | 1.23 |
| R-squared | 99.73 | 99.33 |
| Std. Deviation | 13.87 | 14.12 |
| Alpha | -0.38 | -0.58 |
| Beta | 1.02 | 1.04 |
| Sharpe Ratio | 1.05 | 1 |
| Treynor Ratio | 14.31 | 13.58 |
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.
Performance
Annual Returns
| Year | IWB | SCHB |
| 2020 | 20.8% | 20.77% |
| 2019 | 31.26% | 30.94% |
| 2018 | -4.91% | -5.25% |
| 2017 | 21.53% | 21.18% |
| 2016 | 11.91% | 12.56% |
| 2015 | 0.82% | 0.45% |
| 2014 | 13.08% | 12.67% |
| 2013 | 32.93% | 33.37% |
| 2012 | 16.27% | 16.22% |
| 2011 | 1.36% | 1.4% |
| 2010 | 15.94% | 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
| Fund | Initial Balance | Final Balance | CAGR |
| IWB | $10,000 | $36,624 | 14.64% |
| SCHB | $10,000 | $36,354 | 14.43% |
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.
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