The iShares Russell 1000 Growth ETF (IWF) and the Schwab U.S. TIPS ETF (SCHP) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and SCHP is a Schwab ETFs Inflation-Protected Bond fund. So, what’s the difference between IWF and SCHP? And which fund is better?
The expense ratio of IWF is 0.14 percentage points higher than SCHP’s (0.19% vs. 0.05%). IWF also has a high exposure to the technology sector while SCHP is mostly comprised of AAA bonds. Overall, IWF has provided higher returns than SCHP over the past ten years.
In this article, we’ll compare IWF vs. SCHP. We’ll look at portfolio growth and fund composition, as well as at their annual returns and performance. Moreover, I’ll also discuss IWF’s and SCHP’s industry exposure, risk metrics, and holdings and examine how these affect their overall returns.
|Name||iShares Russell 1000 Growth ETF||Schwab U.S. TIPS ETF|
|Category||Large Growth||Inflation-Protected Bond|
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. TIPS ETF (SCHP) is a Inflation-Protected Bond fund that is issued by Schwab ETFs. It currently has 18.41B total assets under management and has yielded an average annual return of 3.92% over the past 10 years. The fund has a dividend yield of 1.97% with an expense ratio of 0.05%.
IWF’s dividend yield is 1.45% lower than that of SCHP (0.52% vs. 1.97%). Also, IWF yielded on average 13.81% more per year over the past decade (17.72% vs. 3.92%). The expense ratio of IWF is 0.14 percentage points higher than SCHP’s (0.19% vs. 0.05%).
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|Facebook Inc Class A||3.91%|
|Alphabet Inc Class A||3.2%|
|Alphabet Inc Class C||3.03%|
|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%.
|SCHP Bond Sectors||Weight|
SCHP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
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The iShares Russell 1000 Growth ETF (IWF) has a Beta of 1.03 with a Mean Return of 1.48 and a Alpha of 2.16. Its R-squared is 92.93 while IWF’s Sharpe Ratio is 1.19. Furthermore, the fund has a Treynor Ratio of 17.1 and a Standard Deviation of 14.42.
The Schwab U.S. TIPS ETF (SCHP) has a Beta of 1.17 with a R-squared of 66.16 and a Mean Return of 0.28. Its Sharpe Ratio is 0.64 while SCHP’s Alpha is -0.5. Furthermore, the fund has a Standard Deviation of 4.32 and a Treynor Ratio of 2.31.
IWF’s Mean Return is 1.20 points higher than that of SCHP and its R-squared is 26.77 points higher. With a Standard Deviation of 14.42, IWF is slightly more volatile than SCHP. The Alpha and Beta of IWF are 2.66 points higher and 0.14 points lower than SCHP’s Alpha and Beta.
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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 2011 was the strongest year for SCHP, returning 13.38% on an annual basis. The poorest year for SCHP in the last ten years was 2013, with a yield of -8.66%. Most years the Schwab U.S. TIPS ETF has given investors modest returns, such as in 2017, 2014, and 2016, when gains were 2.95%, 3.56%, and 4.6% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 SCHP, the end total would have been $14,418. This equates to a $4,418 profit over 10 years and a compound annual growth rate (CAGR) of 3.92%.
IWF’s CAGR is 13.81 percentage points higher than that of SCHP and as a result, would have yielded $33,594 more on a $10,000 investment. Thus, IWF outperformed SCHP by 13.81% annually.
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