The iShares Russell 1000 Growth ETF (IWF) and the Schwab U.S. Small-Cap ETF (SCHA) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and SCHA is a Schwab ETFs Small Blend fund. So, what’s the difference between IWF and SCHA? And which fund is better?
The expense ratio of IWF is 0.15 percentage points higher than SCHA’s (0.19% vs. 0.04%). IWF also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWF has provided higher returns than SCHA over the past ten years.
In this article, we’ll compare IWF vs. SCHA. We’ll look at performance and industry exposure, as well as at their annual returns and risk metrics. Moreover, I’ll also discuss IWF’s and SCHA’s fund composition, holdings, and portfolio growth and examine how these affect their overall returns.
Summary
| IWF | SCHA | |
| Name | iShares Russell 1000 Growth ETF | Schwab U.S. Small-Cap ETF |
| Category | Large Growth | Small Blend |
| Issuer | iShares | Schwab ETFs |
| AUM | 72.16B | 16.51B |
| Avg. Return | 17.72% | 12.62% |
| Div. Yield | 0.52% | 0.98% |
| Expense Ratio | 0.19% | 0.04% |
The iShares Russell 1000 Growth ETF (IWF) is a Large Growth fund that is issued by iShares. It currently has 72.16B total assets under management and has yielded an average annual return of 17.72% over the past 10 years. The fund has a dividend yield of 0.52% with an expense ratio of 0.19%.
The Schwab U.S. Small-Cap ETF (SCHA) is a Small Blend fund that is issued by Schwab ETFs. It currently has 16.51B total assets under management and has yielded an average annual return of 12.62% over the past 10 years. The fund has a dividend yield of 0.98% with an expense ratio of 0.04%.
IWF’s dividend yield is 0.46% lower than that of SCHA (0.52% vs. 0.98%). Also, IWF yielded on average 5.10% more per year over the past decade (17.72% vs. 12.62%). The expense ratio of IWF is 0.15 percentage points higher than SCHA’s (0.19% vs. 0.04%).
Fund Composition
Industry Exposure
| IWF | SCHA | |
| Technology | 39.29% | 14.91% |
| Industrials | 6.19% | 15.37% |
| Energy | 0.28% | 3.35% |
| Communication Services | 12.82% | 3.5% |
| Utilities | 0.03% | 1.83% |
| Healthcare | 9.23% | 16.5% |
| Consumer Defensive | 4.31% | 3.75% |
| Real Estate | 1.85% | 7.83% |
| Financial Services | 7.36% | 14.49% |
| Consumer Cyclical | 17.62% | 14.48% |
| Basic Materials | 1.01% | 3.98% |
The iShares Russell 1000 Growth ETF (IWF) has the most exposure to the Technology sector at 39.29%. This is followed by Consumer Cyclical and Communication Services at 17.62% and 12.82% respectively. Energy (0.28%), Basic Materials (1.01%), and Real Estate (1.85%) only make up 3.14% of the fund’s total assets.
IWF’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Communication Services stocks at 4.31%, 6.19%, 7.36%, 9.23%, and 12.82%.
The Schwab U.S. Small-Cap ETF (SCHA) has the most exposure to the Healthcare sector at 16.5%. This is followed by Industrials and Technology at 15.37% and 14.91% respectively. Energy (3.35%), Communication Services (3.5%), and Consumer Defensive (3.75%) only make up 10.60% of the fund’s total assets.
SCHA’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Technology stocks at 3.98%, 7.83%, 14.48%, 14.49%, and 14.91%.
IWF is 24.38% more exposed to the Technology sector than SCHA (39.29% vs 14.91%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 3.14% higher and 9.32% higher respectively (17.62% vs. 14.48% and 12.82% vs. 3.5%). In total, Energy, Basic Materials, and Real Estate also make up 12.02% less of the fund’s holdings compared to SCHA (3.14% vs. 15.16%).
Holdings
| IWF Holdings | Weight |
| Apple Inc | 10.51% |
| Microsoft Corp | 9.85% |
| Amazon.com Inc | 6.63% |
| Facebook Inc Class A | 3.91% |
| Alphabet Inc Class A | 3.2% |
| Alphabet Inc Class C | 3.03% |
| Tesla Inc | 2.45% |
| NVIDIA Corp | 2.14% |
| Visa Inc Class A | 1.91% |
| The Home Depot Inc | 1.62% |
IWF’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.51%, 9.85%, 6.63%, 3.91%, and 3.2%.
Alphabet Inc Class C (3.03%), Tesla Inc (2.45%), and NVIDIA Corp (2.14%) have a slightly smaller but still significant weight. Visa Inc Class A and The Home Depot Inc are also represented in the IWF’s holdings at 1.91% and 1.62%.
| SCHA Holdings | Weight |
| AMC Entertainment Holdings Inc Class A | 0.67% |
| Caesars Entertainment Inc | 0.51% |
| Cloudflare Inc | 0.48% |
| NovoCure Ltd | 0.45% |
| Plug Power Inc | 0.41% |
| 10x Genomics Inc Ordinary Shares – Class A | 0.34% |
| GameStop Corp Class A | 0.28% |
| RH | 0.27% |
| Penn National Gaming Inc | 0.27% |
| Axon Enterprise Inc | 0.27% |
SCHA’s Top Holdings are AMC Entertainment Holdings Inc Class A, Caesars Entertainment Inc, Cloudflare Inc, NovoCure Ltd, and Plug Power Inc at 0.67%, 0.51%, 0.48%, 0.45%, and 0.41%.
10x Genomics Inc Ordinary Shares – Class A (0.34%), GameStop Corp Class A (0.28%), and RH (0.27%) have a slightly smaller but still significant weight. Penn National Gaming Inc and Axon Enterprise Inc are also represented in the SCHA’s holdings at 0.27% and 0.27%.
Risk Analysis
| IWF | SCHA | |
| Mean Return | 1.48 | 1.14 |
| R-squared | 92.93 | 82.26 |
| Std. Deviation | 14.42 | 18.68 |
| Alpha | 2.16 | -4.65 |
| Beta | 1.03 | 1.25 |
| Sharpe Ratio | 1.19 | 0.7 |
| Treynor Ratio | 17.1 | 9.62 |
The iShares Russell 1000 Growth ETF (IWF) has a Beta of 1.03 with a R-squared of 92.93 and a Alpha of 2.16. Its Standard Deviation is 14.42 while IWF’s Treynor Ratio is 17.1. Furthermore, the fund has a Sharpe Ratio of 1.19 and a Mean Return of 1.48.
The Schwab U.S. Small-Cap ETF (SCHA) has a Mean Return of 1.14 with a Beta of 1.25 and a Sharpe Ratio of 0.7. Its Standard Deviation is 18.68 while SCHA’s R-squared is 82.26. Furthermore, the fund has a Treynor Ratio of 9.62 and a Alpha of -4.65.
IWF’s Mean Return is 0.34 points higher than that of SCHA and its R-squared is 10.67 points higher. With a Standard Deviation of 14.42, IWF is slightly less volatile than SCHA. The Alpha and Beta of IWF are 6.81 points higher and 0.22 points lower than SCHA’s Alpha and Beta.
Performance
Annual Returns
| Year | IWF | SCHA |
| 2020 | 38.21% | 19.35% |
| 2019 | 36.08% | 26.54% |
| 2018 | -1.68% | -11.75% |
| 2017 | 29.96% | 15.04% |
| 2016 | 6.92% | 19.88% |
| 2015 | 5.48% | -4.24% |
| 2014 | 12.84% | 6.53% |
| 2013 | 33.19% | 39.59% |
| 2012 | 15.03% | 18.24% |
| 2011 | 2.47% | -2.95% |
| 2010 | 16.47% | 28.31% |
IWF had its best year in 2020 with an annual return of 38.21%. IWF’s worst year over the past decade yielded -1.68% and occurred in 2018. In most years the iShares Russell 1000 Growth ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 12.84%, 15.03%, and 16.47% respectively.
The year 2013 was the strongest year for SCHA, returning 39.59% on an annual basis. The poorest year for SCHA in the last ten years was 2018, with a yield of -11.75%. Most years the Schwab U.S. Small-Cap ETF has given investors modest returns, such as in 2017, 2012, and 2020, when gains were 15.04%, 18.24%, and 19.35% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWF | $10,000 | $48,012 | 17.72% |
| SCHA | $10,000 | $30,035 | 12.62% |
A $10,000 investment in IWF would have resulted in a final balance of $48,012. This is a profit of $38,012 over 10 years and amounts to a compound annual growth rate (CAGR) of 17.72%.
With a $10,000 investment in SCHA, the end total would have been $30,035. This equates to a $20,035 profit over 10 years and a compound annual growth rate (CAGR) of 12.62%.
IWF’s CAGR is 5.10 percentage points higher than that of SCHA and as a result, would have yielded $17,977 more on a $10,000 investment. Thus, IWF outperformed SCHA by 5.10% annually.
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