The iShares Russell 1000 Growth ETF (IWF) and the Schwab U.S. Broad Market ETF (SCHB) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and SCHB is a Schwab ETFs Large Blend fund. So, what’s the difference between IWF and SCHB? And which fund is better?
The expense ratio of IWF is 0.16 percentage points higher than SCHB’s (0.19% vs. 0.03%). IWF also has a higher exposure to the technology sector and a higher standard deviation. Overall, IWF has provided higher returns than SCHB over the past ten years.
In this article, we’ll compare IWF vs. SCHB. We’ll look at industry exposure and fund composition, as well as at their holdings and risk metrics. Moreover, I’ll also discuss IWF’s and SCHB’s annual returns, portfolio growth, and performance and examine how these affect their overall returns.
Summary
| IWF | SCHB | |
| Name | iShares Russell 1000 Growth ETF | Schwab U.S. Broad Market ETF |
| Category | Large Growth | Large Blend |
| Issuer | iShares | Schwab ETFs |
| AUM | 72.16B | 21.44B |
| Avg. Return | 17.72% | 14.43% |
| Div. Yield | 0.52% | 1.39% |
| Expense Ratio | 0.19% | 0.03% |
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. Broad Market ETF (SCHB) is a Large Blend fund that is issued by Schwab ETFs. It currently has 21.44B total assets under management and has yielded an average annual return of 14.43% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.03%.
IWF’s dividend yield is 0.87% lower than that of SCHB (0.52% vs. 1.39%). Also, IWF yielded on average 3.29% more per year over the past decade (17.72% vs. 14.43%). The expense ratio of IWF is 0.16 percentage points higher than SCHB’s (0.19% vs. 0.03%).
Fund Composition
Industry Exposure
| IWF | SCHB | |
| Technology | 39.29% | 24.15% |
| Industrials | 6.19% | 9.29% |
| Energy | 0.28% | 2.78% |
| Communication Services | 12.82% | 10.52% |
| Utilities | 0.03% | 2.32% |
| Healthcare | 9.23% | 13.37% |
| Consumer Defensive | 4.31% | 5.76% |
| Real Estate | 1.85% | 3.58% |
| Financial Services | 7.36% | 13.88% |
| Consumer Cyclical | 17.62% | 11.9% |
| Basic Materials | 1.01% | 2.45% |
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. Broad Market ETF (SCHB) has the most exposure to the Technology sector at 24.15%. This is followed by Financial Services and Healthcare at 13.88% and 13.37% respectively. Basic Materials (2.45%), Energy (2.78%), and Real Estate (3.58%) only make up 8.81% of the fund’s total assets.
SCHB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.76%, 9.29%, 10.52%, 11.9%, and 13.37%.
IWF is 15.14% more exposed to the Technology sector than SCHB (39.29% vs 24.15%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 5.72% higher and 2.30% higher respectively (17.62% vs. 11.9% and 12.82% vs. 10.52%). In total, Energy, Basic Materials, and Real Estate also make up 5.67% less of the fund’s holdings compared to SCHB (3.14% vs. 8.81%).
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%.
| SCHB Holdings | Weight |
| Apple Inc | 4.86% |
| Microsoft Corp | 4.61% |
| Amazon.com Inc | 3.33% |
| Facebook Inc A | 1.88% |
| Alphabet Inc A | 1.66% |
| Alphabet Inc Class C | 1.61% |
| Berkshire Hathaway Inc Class B | 1.19% |
| Tesla Inc | 1.18% |
| NVIDIA Corp | 1.13% |
| JPMorgan Chase & Co | 1.06% |
SCHB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 4.86%, 4.61%, 3.33%, 1.88%, and 1.66%.
Alphabet Inc Class C (1.61%), Berkshire Hathaway Inc Class B (1.19%), and Tesla Inc (1.18%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHB’s holdings at 1.13% and 1.06%.
Risk Analysis
| IWF | SCHB | |
| Mean Return | 1.48 | 1.23 |
| R-squared | 92.93 | 99.33 |
| Std. Deviation | 14.42 | 14.12 |
| Alpha | 2.16 | -0.58 |
| Beta | 1.03 | 1.04 |
| Sharpe Ratio | 1.19 | 1 |
| Treynor Ratio | 17.1 | 13.58 |
The iShares Russell 1000 Growth ETF (IWF) has a Sharpe Ratio of 1.19 with a Mean Return of 1.48 and a Treynor Ratio of 17.1. Its R-squared is 92.93 while IWF’s Beta is 1.03. Furthermore, the fund has a Standard Deviation of 14.42 and a Alpha of 2.16.
The Schwab U.S. Broad Market ETF (SCHB) has a Treynor Ratio of 13.58 with a R-squared of 99.33 and a Beta of 1.04. Its Standard Deviation is 14.12 while SCHB’s Mean Return is 1.23. Furthermore, the fund has a Sharpe Ratio of 1 and a Alpha of -0.58.
IWF’s Mean Return is 0.25 points higher than that of SCHB and its R-squared is 6.40 points lower. With a Standard Deviation of 14.42, IWF is slightly more volatile than SCHB. The Alpha and Beta of IWF are 2.74 points higher and 0.01 points lower than SCHB’s Alpha and Beta.
Performance
Annual Returns
| Year | IWF | SCHB |
| 2020 | 38.21% | 20.77% |
| 2019 | 36.08% | 30.94% |
| 2018 | -1.68% | -5.25% |
| 2017 | 29.96% | 21.18% |
| 2016 | 6.92% | 12.56% |
| 2015 | 5.48% | 0.45% |
| 2014 | 12.84% | 12.67% |
| 2013 | 33.19% | 33.37% |
| 2012 | 15.03% | 16.22% |
| 2011 | 2.47% | 1.4% |
| 2010 | 16.47% | 17.1% |
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 SCHB, returning 33.37% on an annual basis. The poorest year for SCHB in the last ten years was 2018, with a yield of -5.25%. Most years the Schwab U.S. Broad Market ETF has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 12.67%, 16.22%, and 17.1% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWF | $10,000 | $48,012 | 17.72% |
| SCHB | $10,000 | $36,354 | 14.43% |
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 SCHB, the end total would have been $36,354. This equates to a $26,354 profit over 10 years and a compound annual growth rate (CAGR) of 14.43%.
IWF’s CAGR is 3.29 percentage points higher than that of SCHB and as a result, would have yielded $11,658 more on a $10,000 investment. Thus, IWF outperformed SCHB by 3.29% annually.
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