The iShares Russell 1000 Value ETF (IWD) and the Schwab U.S. Large-Cap ETF (SCHX) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and SCHX is a Schwab ETFs Large Blend fund. So, what’s the difference between IWD and SCHX? And which fund is better?
The expense ratio of IWD is 0.16 percentage points higher than SCHX’s (0.19% vs. 0.03%). IWD also has a higher exposure to the financial services sector and a higher standard deviation. Overall, IWD has provided lower returns than SCHX over the past ten years.
In this article, we’ll compare IWD vs. SCHX. We’ll look at risk metrics and fund composition, as well as at their annual returns and portfolio growth. Moreover, I’ll also discuss IWD’s and SCHX’s holdings, performance, and industry exposure and examine how these affect their overall returns.
|Name||iShares Russell 1000 Value ETF||Schwab U.S. Large-Cap ETF|
|Category||Large Value||Large Blend|
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 ETF (SCHX) is a Large Blend fund that is issued by Schwab ETFs. It currently has 30.89B total assets under management and has yielded an average annual return of 14.60% over the past 10 years. The fund has a dividend yield of 1.41% with an expense ratio of 0.03%.
IWD’s dividend yield is 0.16% higher than that of SCHX (1.57% vs. 1.41%). Also, IWD yielded on average 3.20% less per year over the past decade (11.40% vs. 14.60%). The expense ratio of IWD is 0.16 percentage points higher than SCHX’s (0.19% vs. 0.03%).
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 ETF (SCHX) has the most exposure to the Technology sector at 25.13%. This is followed by Financial Services and Healthcare at 13.82% and 13.04% respectively. Utilities (2.37%), Energy (2.72%), and Real Estate (3.13%) only make up 8.22% of the fund’s total assets.
SCHX’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.65%, 11.26%, 11.63%, and 13.04%.
IWD is 6.61% more exposed to the Financial Services sector than SCHX (20.43% vs 13.82%). IWD’s exposure to Healthcare and Industrials stocks is 4.74% higher and 3.12% higher respectively (17.78% vs. 13.04% and 11.77% vs. 8.65%). In total, Energy, Utilities, and Real Estate also make up 6.36% more of the fund’s holdings compared to SCHX (14.58% vs. 8.22%).
|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%|
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%.
|Facebook Inc A||2.08%|
|Alphabet Inc A||1.84%|
|Alphabet Inc Class C||1.78%|
|Berkshire Hathaway Inc Class B||1.32%|
|JPMorgan Chase & Co||1.18%|
SCHX’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 5.37%, 5.1%, 3.69%, 2.08%, and 1.84%.
Alphabet Inc Class C (1.78%), Berkshire Hathaway Inc Class B (1.32%), and Tesla Inc (1.31%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHX’s holdings at 1.25% and 1.18%.
The iShares Russell 1000 Value ETF (IWD) has a Mean Return of 1.03 with a R-squared of 92.38 and a Treynor Ratio of 11.06. Its Beta is 1.02 while IWD’s Alpha is -3.23. Furthermore, the fund has a Standard Deviation of 14.35 and a Sharpe Ratio of 0.81.
The Schwab U.S. Large-Cap ETF (SCHX) has a Standard Deviation of 13.8 with a Mean Return of 1.24 and a Alpha of -0.14. Its Sharpe Ratio is 1.03 while SCHX’s R-squared is 99.83. Furthermore, the fund has a Treynor Ratio of 14.06 and a Beta of 1.02.
IWD’s Mean Return is 0.21 points lower than that of SCHX and its R-squared is 7.45 points lower. With a Standard Deviation of 14.35, IWD is slightly more volatile than SCHX. The Alpha and Beta of IWD are 3.09 points lower and 0.00 points lower than SCHX’s Alpha and Beta.
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 2013 was the strongest year for SCHX, returning 32.54% on an annual basis. The poorest year for SCHX in the last ten years was 2018, with a yield of -4.52%. Most years the Schwab U.S. Large-Cap ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.33%, 15.88%, and 16.06% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 SCHX, the end total would have been $36,987. This equates to a $26,987 profit over 10 years and a compound annual growth rate (CAGR) of 14.60%.
IWD’s CAGR is 3.20 percentage points lower than that of SCHX and as a result, would have yielded $10,321 less on a $10,000 investment. Thus, IWD performed worse than SCHX by 3.20% annually.
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