The iShares Russell 1000 ETF (IWB) and the Schwab U.S. Dividend Equity ETF (SCHD) are both among the Top 100 ETFs. IWB is a iShares Large Blend fund and SCHD is a Schwab ETFs Large Value fund. So, what’s the difference between IWB and SCHD? And which fund is better?
The expense ratio of IWB is 0.09 percentage points higher than SCHD’s (0.15% vs. 0.06%). IWB also has a higher exposure to the technology sector and a higher standard deviation. Overall, IWB has provided lower returns than SCHD over the past ten years.
In this article, we’ll compare IWB vs. SCHD. We’ll look at annual returns and performance, as well as at their industry exposure and holdings. Moreover, I’ll also discuss IWB’s and SCHD’s risk metrics, fund composition, and portfolio growth and examine how these affect their overall returns.
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|Name||iShares Russell 1000 ETF||Schwab U.S. Dividend Equity ETF|
|Category||Large Blend||Large Value|
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. Dividend Equity ETF (SCHD) is a Large Value fund that is issued by Schwab ETFs. It currently has 26B total assets under management and has yielded an average annual return of 14.80% over the past 10 years. The fund has a dividend yield of 2.89% with an expense ratio of 0.06%.
IWB’s dividend yield is 1.75% lower than that of SCHD (1.14% vs. 2.89%). Also, IWB yielded on average 0.17% less per year over the past decade (14.64% vs. 14.80%). The expense ratio of IWB is 0.09 percentage points higher than SCHD’s (0.15% vs. 0.06%).
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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. Dividend Equity ETF (SCHD) has the most exposure to the Financial Services sector at 21.69%. This is followed by Industrials and Technology at 18.05% and 16.26% respectively. Utilities (0.0%), Energy (1.87%), and Basic Materials (2.13%) only make up 4.00% of the fund’s total assets.
SCHD’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Healthcare, Consumer Defensive, and Technology stocks at 4.96%, 8.36%, 12.64%, 14.04%, and 16.26%.
IWB is 9.07% more exposed to the Technology sector than SCHD (25.33% vs 16.26%). IWB’s exposure to Financial Services and Healthcare stocks is 8.05% lower and 0.71% higher respectively (13.64% vs. 21.69% and 13.35% vs. 12.64%). In total, Utilities, Energy, and Real Estate also make up 6.27% more of the fund’s holdings compared to SCHD (8.14% vs. 1.87%).
|Facebook Inc Class A||2.03%|
|Alphabet Inc Class A||1.93%|
|Alphabet Inc Class C||1.82%|
|Berkshire Hathaway Inc Class B||1.24%|
|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%.
|Merck & Co Inc||4.24%|
|The Home Depot Inc||4.19%|
|Texas Instruments Inc||4.16%|
|Verizon Communications Inc||3.96%|
|Cisco Systems Inc||3.96%|
SCHD’s Top Holdings are Merck & Co Inc, The Home Depot Inc, Texas Instruments Inc, Broadcom Inc, and Amgen Inc at 4.24%, 4.19%, 4.16%, 4.15%, and 4.11%.
PepsiCo Inc (4.09%), BlackRock Inc (4.05%), and Pfizer Inc (3.97%) have a slightly smaller but still significant weight. Verizon Communications Inc and Cisco Systems Inc are also represented in the SCHD’s holdings at 3.96% and 3.96%.
The iShares Russell 1000 ETF (IWB) has a Treynor Ratio of 14.31 with a Alpha of -0.38 and a Sharpe Ratio of 1.05. Its R-squared is 99.73 while IWB’s Beta is 1.02. Furthermore, the fund has a Mean Return of 1.27 and a Standard Deviation of 13.87.
The Schwab U.S. Dividend Equity ETF (SCHD) has a Mean Return of 0 with a Sharpe Ratio of 0 and a Standard Deviation of 0. Its Beta is 0 while SCHD’s Treynor Ratio is 0. Furthermore, the fund has a Alpha of 0 and a R-squared of 0.
IWB’s Mean Return is 1.27 points higher than that of SCHD and its R-squared is 99.73 points higher. With a Standard Deviation of 13.87, IWB is slightly more volatile than SCHD. The Alpha and Beta of IWB are 0.38 points lower and 1.02 points higher than SCHD’s Alpha and Beta.
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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 SCHD, returning 32.9% on an annual basis. The poorest year for SCHD in the last ten years was 2018, with a yield of -5.46%. Most years the Schwab U.S. Dividend Equity ETF has given investors modest returns, such as in 2012, 2014, and 2020, when gains were 11.4%, 11.66%, and 15.11% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IWB would have resulted in a final balance of $31,077. This is a profit of $21,077 over 8 years and amounts to a compound annual growth rate (CAGR) of 14.64%.
With a $10,000 investment in SCHD, the end total would have been $28,823. This equates to a $18,823 profit over 8 years and a compound annual growth rate (CAGR) of 14.80%.
IWB’s CAGR is 0.17 percentage points lower than that of SCHD and as a result, would have yielded $2,254 more on a $10,000 investment. Thus, IWB performed worse than SCHD by 0.17% annually.
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