IWB vs. SCHF: What’s The Difference?

The iShares Russell 1000 ETF (IWB) and the Schwab International Equity ETF (SCHF) are both among the Top 100 ETFs. IWB is a iShares Large Blend fund and SCHF is a Schwab ETFs Foreign Large Blend fund. So, what’s the difference between IWB and SCHF? And which fund is better?

The expense ratio of IWB is 0.09 percentage points higher than SCHF’s (0.15% vs. 0.06%). IWB also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWB has provided higher returns than SCHF over the past ten years.

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

Summary

IWB SCHF
Name iShares Russell 1000 ETF Schwab International Equity ETF
Category Large Blend Foreign Large Blend
Issuer iShares Schwab ETFs
AUM 30.54B 26.99B
Avg. Return 14.64% 6.43%
Div. Yield 1.14% 2.16%
Expense Ratio 0.15% 0.06%

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 International Equity ETF (SCHF) is a Foreign Large Blend fund that is issued by Schwab ETFs. It currently has 26.99B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 2.16% with an expense ratio of 0.06%.

IWB’s dividend yield is 1.02% lower than that of SCHF (1.14% vs. 2.16%). Also, IWB yielded on average 8.21% more per year over the past decade (14.64% vs. 6.43%). The expense ratio of IWB is 0.09 percentage points higher than SCHF’s (0.15% vs. 0.06%).

Fund Composition

Industry Exposure

IWB vs. SCHF - Industry Exposure

IWB SCHF
Technology 25.33% 11.55%
Industrials 8.88% 14.86%
Energy 2.44% 4.23%
Communication Services 10.83% 5.65%
Utilities 2.36% 3.09%
Healthcare 13.35% 11.05%
Consumer Defensive 5.97% 9.41%
Real Estate 3.34% 3.17%
Financial Services 13.64% 17.85%
Consumer Cyclical 11.85% 10.87%
Basic Materials 2.02% 8.26%

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 International Equity ETF (SCHF) has the most exposure to the Financial Services sector at 17.85%. This is followed by Industrials and Technology at 14.86% and 11.55% respectively. Real Estate (3.17%), Energy (4.23%), and Communication Services (5.65%) only make up 13.05% of the fund’s total assets.

SCHF’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Consumer Cyclical, Healthcare, and Technology stocks at 8.26%, 9.41%, 10.87%, 11.05%, and 11.55%.

IWB is 13.78% more exposed to the Technology sector than SCHF (25.33% vs 11.55%). IWB’s exposure to Financial Services and Healthcare stocks is 4.21% lower and 2.30% higher respectively (13.64% vs. 17.85% and 13.35% vs. 11.05%). In total, Utilities, Energy, and Real Estate also make up 2.35% less of the fund’s holdings compared to SCHF (8.14% vs. 10.49%).

Holdings

IWB - 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%.

SCHF - Holdings

SCHF Holdings Weight
Nestle SA 1.66%
Samsung Electronics Co Ltd 1.6%
ASML Holding NV 1.29%
Roche Holding AG 1.24%
Toyota Motor Corp 1.02%
LVMH Moet Hennessy Louis Vuitton SE 0.93%
Novartis AG 0.92%
Shopify Inc A 0.78%
AstraZeneca PLC 0.75%
SAP SE 0.74%

SCHF’s Top Holdings are Nestle SA, Samsung Electronics Co Ltd, ASML Holding NV, Roche Holding AG, and Toyota Motor Corp at 1.66%, 1.6%, 1.29%, 1.24%, and 1.02%.

LVMH Moet Hennessy Louis Vuitton SE (0.93%), Novartis AG (0.92%), and Shopify Inc A (0.78%) have a slightly smaller but still significant weight. AstraZeneca PLC and SAP SE are also represented in the SCHF’s holdings at 0.75% and 0.74%.

Risk Analysis

IWB SCHF
Mean Return 1.27 0.58
R-squared 99.73 98.16
Std. Deviation 13.87 15.08
Alpha -0.38 0.53
Beta 1.02 0.99
Sharpe Ratio 1.05 0.42
Treynor Ratio 14.31 5.39

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

The Schwab International Equity ETF (SCHF) has a Sharpe Ratio of 0.42 with a Beta of 0.99 and a Standard Deviation of 15.08. Its R-squared is 98.16 while SCHF’s Alpha is 0.53. Furthermore, the fund has a Treynor Ratio of 5.39 and a Mean Return of 0.58.

IWB’s Mean Return is 0.69 points higher than that of SCHF and its R-squared is 1.57 points higher. With a Standard Deviation of 13.87, IWB is slightly less volatile than SCHF. The Alpha and Beta of IWB are 0.91 points lower and 0.03 points higher than SCHF’s Alpha and Beta.

Performance

Annual Returns

IWB vs. SCHF - Annual Returns

Year IWB SCHF
2020 20.8% 9.86%
2019 31.26% 22.15%
2018 -4.91% -14.39%
2017 21.53% 25.83%
2016 11.91% 2.88%
2015 0.82% -2.44%
2014 13.08% -4.44%
2013 32.93% 20.03%
2012 16.27% 17.12%
2011 1.36% -12.32%
2010 15.94% 8.6%

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 2017 was the strongest year for SCHF, returning 25.83% on an annual basis. The poorest year for SCHF in the last ten years was 2018, with a yield of -14.39%. Most years the Schwab International Equity ETF has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 2.88%, 8.6%, and 9.86% respectively.

Portfolio Growth

IWB vs. SCHF - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWB $10,000 $36,624 14.64%
SCHF $10,000 $17,089 6.43%

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 SCHF, the end total would have been $17,089. This equates to a $7,089 profit over 10 years and a compound annual growth rate (CAGR) of 6.43%.

IWB’s CAGR is 8.21 percentage points higher than that of SCHF and as a result, would have yielded $19,535 more on a $10,000 investment. Thus, IWB outperformed SCHF by 8.21% annually.


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