The iShares Russell 1000 Value ETF (IWD) and the Schwab U.S. Large-Cap Growth ETF (SCHG) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and SCHG is a Schwab ETFs Large Growth fund. So, what’s the difference between IWD and SCHG? And which fund is better?
The expense ratio of IWD is 0.15 percentage points higher than SCHG’s (0.19% vs. 0.04%). IWD also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IWD has provided lower returns than SCHG over the past ten years.
In this article, we’ll compare IWD vs. SCHG. We’ll look at risk metrics and performance, as well as at their industry exposure and portfolio growth. Moreover, I’ll also discuss IWD’s and SCHG’s fund composition, annual returns, and holdings and examine how these affect their overall returns.
Summary
| IWD | SCHG | |
| Name | iShares Russell 1000 Value ETF | Schwab U.S. Large-Cap Growth ETF |
| Category | Large Value | Large Growth |
| Issuer | iShares | Schwab ETFs |
| AUM | 54.1B | 15.16B |
| Avg. Return | 11.40% | 17.81% |
| Div. Yield | 1.57% | 0.43% |
| Expense Ratio | 0.19% | 0.04% |
The iShares Russell 1000 Value ETF (IWD) is a Large Value fund that is issued by iShares. It currently has 54.1B total assets under management and has yielded an average annual return of 11.40% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.19%.
The Schwab U.S. Large-Cap Growth ETF (SCHG) is a Large Growth fund that is issued by Schwab ETFs. It currently has 15.16B total assets under management and has yielded an average annual return of 17.81% over the past 10 years. The fund has a dividend yield of 0.43% with an expense ratio of 0.04%.
IWD’s dividend yield is 1.14% higher than that of SCHG (1.57% vs. 0.43%). Also, IWD yielded on average 6.41% less per year over the past decade (11.40% vs. 17.81%). The expense ratio of IWD is 0.15 percentage points higher than SCHG’s (0.19% vs. 0.04%).
Fund Composition
Industry Exposure
| IWD | SCHG | |
| Technology | 10.28% | 39.21% |
| Industrials | 11.77% | 3.01% |
| Energy | 4.76% | 0.2% |
| Communication Services | 8.67% | 17.07% |
| Utilities | 4.88% | 0.0% |
| Healthcare | 17.78% | 12.05% |
| Consumer Defensive | 7.76% | 2.15% |
| Real Estate | 4.94% | 1.64% |
| Financial Services | 20.43% | 7.98% |
| Consumer Cyclical | 5.62% | 15.01% |
| Basic Materials | 3.1% | 1.68% |
The iShares Russell 1000 Value ETF (IWD) has the most exposure to the Financial Services sector at 20.43%. This is followed by Healthcare and Industrials at 17.78% and 11.77% respectively. Energy (4.76%), Utilities (4.88%), and Real Estate (4.94%) only make up 14.58% of the fund’s total assets.
IWD’s mid-section with moderate exposure is comprised of Consumer Cyclical, Consumer Defensive, Communication Services, Technology, and Industrials stocks at 5.62%, 7.76%, 8.67%, 10.28%, and 11.77%.
The Schwab U.S. Large-Cap Growth ETF (SCHG) has the most exposure to the Technology sector at 39.21%. This is followed by Communication Services and Consumer Cyclical at 17.07% and 15.01% respectively. Energy (0.2%), Real Estate (1.64%), and Basic Materials (1.68%) only make up 3.52% of the fund’s total assets.
SCHG’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 2.15%, 3.01%, 7.98%, 12.05%, and 15.01%.
IWD is 12.45% more exposed to the Financial Services sector than SCHG (20.43% vs 7.98%). IWD’s exposure to Healthcare and Industrials stocks is 5.73% higher and 8.76% higher respectively (17.78% vs. 12.05% and 11.77% vs. 3.01%). In total, Energy, Utilities, and Real Estate also make up 12.74% more of the fund’s holdings compared to SCHG (14.58% vs. 1.84%).
Holdings
| IWD Holdings | Weight |
| Berkshire Hathaway Inc Class B | 2.58% |
| JPMorgan Chase & Co | 2.25% |
| Johnson & Johnson | 2.24% |
| UnitedHealth Group Inc | 1.78% |
| Procter & Gamble Co | 1.71% |
| The Walt Disney Co | 1.5% |
| Bank of America Corp | 1.43% |
| Comcast Corp Class A | 1.33% |
| Exxon Mobil Corp | 1.2% |
| Pfizer Inc | 1.18% |
IWD’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.58%, 2.25%, 2.24%, 1.78%, and 1.71%.
The Walt Disney Co (1.5%), Bank of America Corp (1.43%), and Comcast Corp Class A (1.33%) have a slightly smaller but still significant weight. Exxon Mobil Corp and Pfizer Inc are also represented in the IWD’s holdings at 1.2% and 1.18%.
| SCHG Holdings | Weight |
| Apple Inc | 11.49% |
| Microsoft Corp | 10.91% |
| Amazon.com Inc | 7.89% |
| Facebook Inc A | 4.45% |
| Alphabet Inc A | 3.93% |
| Alphabet Inc Class C | 3.82% |
| Tesla Inc | 2.8% |
| NVIDIA Corp | 2.67% |
| Visa Inc Class A | 2.12% |
| UnitedHealth Group Inc | 2.02% |
SCHG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 11.49%, 10.91%, 7.89%, 4.45%, and 3.93%.
Alphabet Inc Class C (3.82%), Tesla Inc (2.8%), and NVIDIA Corp (2.67%) have a slightly smaller but still significant weight. Visa Inc Class A and UnitedHealth Group Inc are also represented in the SCHG’s holdings at 2.12% and 2.02%.
Risk Analysis
| IWD | SCHG | |
| Mean Return | 1.03 | 1.46 |
| R-squared | 92.38 | 92.92 |
| Std. Deviation | 14.35 | 14.78 |
| Alpha | -3.23 | 1.97 |
| Beta | 1.02 | 1.05 |
| Sharpe Ratio | 0.81 | 1.14 |
| Treynor Ratio | 11.06 | 16.3 |
The iShares Russell 1000 Value ETF (IWD) has a Beta of 1.02 with a Sharpe Ratio of 0.81 and a Alpha of -3.23. Its Mean Return is 1.03 while IWD’s Standard Deviation is 14.35. Furthermore, the fund has a Treynor Ratio of 11.06 and a R-squared of 92.38.
The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Standard Deviation of 14.78 with a Sharpe Ratio of 1.14 and a Alpha of 1.97. Its Mean Return is 1.46 while SCHG’s R-squared is 92.92. Furthermore, the fund has a Beta of 1.05 and a Treynor Ratio of 16.3.
IWD’s Mean Return is 0.43 points lower than that of SCHG and its R-squared is 0.54 points lower. With a Standard Deviation of 14.35, IWD is slightly less volatile than SCHG. The Alpha and Beta of IWD are 5.20 points lower and 0.03 points lower than SCHG’s Alpha and Beta.
Performance
Annual Returns
| Year | IWD | SCHG |
| 2020 | 2.67% | 39.13% |
| 2019 | 26.34% | 36.21% |
| 2018 | -8.4% | -1.35% |
| 2017 | 13.47% | 28.04% |
| 2016 | 17.09% | 6.76% |
| 2015 | -3.95% | 3.26% |
| 2014 | 13.21% | 15.74% |
| 2013 | 32.18% | 33.96% |
| 2012 | 17.28% | 17.02% |
| 2011 | 0.21% | -0.67% |
| 2010 | 15.3% | 16.83% |
IWD had its best year in 2013 with an annual return of 32.18%. IWD’s worst year over the past decade yielded -8.4% and occurred in 2018. In most years the iShares Russell 1000 Value ETF provided moderate returns such as in 2014, 2017, and 2010 where annual returns amounted to 13.21%, 13.47%, and 15.3% respectively.
The year 2020 was the strongest year for SCHG, returning 39.13% on an annual basis. The poorest year for SCHG in the last ten years was 2018, with a yield of -1.35%. Most years the Schwab U.S. Large-Cap Growth ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 15.74%, 16.83%, and 17.02% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWD | $10,000 | $26,666 | 11.40% |
| SCHG | $10,000 | $47,556 | 17.81% |
A $10,000 investment in IWD would have resulted in a final balance of $26,666. This is a profit of $16,666 over 10 years and amounts to a compound annual growth rate (CAGR) of 11.40%.
With a $10,000 investment in SCHG, the end total would have been $47,556. This equates to a $37,556 profit over 10 years and a compound annual growth rate (CAGR) of 17.81%.
IWD’s CAGR is 6.41 percentage points lower than that of SCHG and as a result, would have yielded $20,890 less on a $10,000 investment. Thus, IWD performed worse than SCHG by 6.41% annually.
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