The iShares Russell 1000 Growth ETF (IWF) and the Schwab U.S. Dividend Equity ETF (SCHD) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and SCHD is a Schwab ETFs Large Value fund. So, what’s the difference between IWF and SCHD? And which fund is better?
The expense ratio of IWF is 0.13 percentage points higher than SCHD’s (0.19% vs. 0.06%). IWF also has a higher exposure to the technology sector and a higher standard deviation. Overall, IWF has provided higher returns than SCHD over the past ten years.
In this article, we’ll compare IWF vs. SCHD. We’ll look at holdings and annual returns, as well as at their industry exposure and risk metrics. Moreover, I’ll also discuss IWF’s and SCHD’s performance, portfolio growth, and fund composition and examine how these affect their overall returns.
Summary
| IWF | SCHD | |
| Name | iShares Russell 1000 Growth ETF | Schwab U.S. Dividend Equity ETF |
| Category | Large Growth | Large Value |
| Issuer | iShares | Schwab ETFs |
| AUM | 72.16B | 26B |
| Avg. Return | 17.72% | 14.80% |
| Div. Yield | 0.52% | 2.89% |
| Expense Ratio | 0.19% | 0.06% |
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. Dividend Equity ETF (SCHD) is a Large Value fund that is issued by Schwab ETFs. It currently has 26B total assets under management and has yielded an average annual return of 14.80% over the past 10 years. The fund has a dividend yield of 2.89% with an expense ratio of 0.06%.
IWF’s dividend yield is 2.37% lower than that of SCHD (0.52% vs. 2.89%). Also, IWF yielded on average 2.92% more per year over the past decade (17.72% vs. 14.80%). The expense ratio of IWF is 0.13 percentage points higher than SCHD’s (0.19% vs. 0.06%).
Fund Composition
Industry Exposure
| IWF | SCHD | |
| Technology | 39.29% | 16.26% |
| Industrials | 6.19% | 18.05% |
| Energy | 0.28% | 1.87% |
| Communication Services | 12.82% | 4.96% |
| Utilities | 0.03% | 0.0% |
| Healthcare | 9.23% | 12.64% |
| Consumer Defensive | 4.31% | 14.04% |
| Real Estate | 1.85% | 0.0% |
| Financial Services | 7.36% | 21.69% |
| Consumer Cyclical | 17.62% | 8.36% |
| Basic Materials | 1.01% | 2.13% |
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. Dividend Equity ETF (SCHD) has the most exposure to the Financial Services sector at 21.69%. This is followed by Industrials and Technology at 18.05% and 16.26% respectively. Utilities (0.0%), Energy (1.87%), and Basic Materials (2.13%) only make up 4.00% of the fund’s total assets.
SCHD’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Healthcare, Consumer Defensive, and Technology stocks at 4.96%, 8.36%, 12.64%, 14.04%, and 16.26%.
IWF is 23.03% more exposed to the Technology sector than SCHD (39.29% vs 16.26%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 9.26% higher and 7.86% higher respectively (17.62% vs. 8.36% and 12.82% vs. 4.96%). In total, Energy, Basic Materials, and Real Estate also make up 0.86% less of the fund’s holdings compared to SCHD (3.14% vs. 4.00%).
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%.
| SCHD Holdings | Weight |
| Merck & Co Inc | 4.24% |
| The Home Depot Inc | 4.19% |
| Texas Instruments Inc | 4.16% |
| Broadcom Inc | 4.15% |
| Amgen Inc | 4.11% |
| PepsiCo Inc | 4.09% |
| BlackRock Inc | 4.05% |
| Pfizer Inc | 3.97% |
| Verizon Communications Inc | 3.96% |
| Cisco Systems Inc | 3.96% |
SCHD’s Top Holdings are Merck & Co Inc, The Home Depot Inc, Texas Instruments Inc, Broadcom Inc, and Amgen Inc at 4.24%, 4.19%, 4.16%, 4.15%, and 4.11%.
PepsiCo Inc (4.09%), BlackRock Inc (4.05%), and Pfizer Inc (3.97%) have a slightly smaller but still significant weight. Verizon Communications Inc and Cisco Systems Inc are also represented in the SCHD’s holdings at 3.96% and 3.96%.
Risk Analysis
| IWF | SCHD | |
| Mean Return | 1.48 | 0 |
| R-squared | 92.93 | 0 |
| Std. Deviation | 14.42 | 0 |
| Alpha | 2.16 | 0 |
| Beta | 1.03 | 0 |
| Sharpe Ratio | 1.19 | 0 |
| Treynor Ratio | 17.1 | 0 |
The iShares Russell 1000 Growth ETF (IWF) has a Alpha of 2.16 with a Treynor Ratio of 17.1 and a Beta of 1.03. Its Mean Return is 1.48 while IWF’s Sharpe Ratio is 1.19. Furthermore, the fund has a R-squared of 92.93 and a Standard Deviation of 14.42.
The Schwab U.S. Dividend Equity ETF (SCHD) has a Treynor Ratio of 0 with a Sharpe Ratio of 0 and a Mean Return of 0. Its R-squared is 0 while SCHD’s Standard Deviation is 0. Furthermore, the fund has a Alpha of 0 and a Beta of 0.
IWF’s Mean Return is 1.48 points higher than that of SCHD and its R-squared is 92.93 points higher. With a Standard Deviation of 14.42, IWF is slightly more volatile than SCHD. The Alpha and Beta of IWF are 2.16 points higher and 1.03 points higher than SCHD’s Alpha and Beta.
Performance
Annual Returns
| Year | IWF | SCHD |
| 2020 | 38.21% | 15.11% |
| 2019 | 36.08% | 27.28% |
| 2018 | -1.68% | -5.46% |
| 2017 | 29.96% | 20.88% |
| 2016 | 6.92% | 16.25% |
| 2015 | 5.48% | -0.21% |
| 2014 | 12.84% | 11.66% |
| 2013 | 33.19% | 32.9% |
| 2012 | 15.03% | 11.4% |
| 2011 | 2.47% | 0.0% |
| 2010 | 16.47% | 0.0% |
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 SCHD, returning 32.9% on an annual basis. The poorest year for SCHD in the last ten years was 2018, with a yield of -5.46%. Most years the Schwab U.S. Dividend Equity ETF has given investors modest returns, such as in 2012, 2014, and 2020, when gains were 11.4%, 11.66%, and 15.11% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWF | $10,000 | $40,733 | 17.72% |
| SCHD | $10,000 | $28,823 | 14.80% |
A $10,000 investment in IWF would have resulted in a final balance of $40,733. This is a profit of $30,733 over 8 years and amounts to a compound annual growth rate (CAGR) of 17.72%.
With a $10,000 investment in SCHD, the end total would have been $28,823. This equates to a $18,823 profit over 8 years and a compound annual growth rate (CAGR) of 14.80%.
IWF’s CAGR is 2.92 percentage points higher than that of SCHD and as a result, would have yielded $11,910 more on a $10,000 investment. Thus, IWF outperformed SCHD by 2.92% annually.
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