The iShares Russell Mid-Cap ETF (IWR) and the Schwab U.S. Small-Cap ETF (SCHA) are both among the Top 100 ETFs. IWR is a iShares Mid-Cap Blend fund and SCHA is a Schwab ETFs Small Blend fund. So, what’s the difference between IWR and SCHA? And which fund is better?
The expense ratio of IWR is 0.15 percentage points higher than SCHA’s (0.19% vs. 0.04%). IWR also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWR has provided higher returns than SCHA over the past ten years.
In this article, we’ll compare IWR vs. SCHA. We’ll look at performance and annual returns, as well as at their portfolio growth and risk metrics. Moreover, I’ll also discuss IWR’s and SCHA’s industry exposure, holdings, and fund composition and examine how these affect their overall returns.
Summary
| IWR | SCHA | |
| Name | iShares Russell Mid-Cap ETF | Schwab U.S. Small-Cap ETF |
| Category | Mid-Cap Blend | Small Blend |
| Issuer | iShares | Schwab ETFs |
| AUM | 29.84B | 16.51B |
| Avg. Return | 14.15% | 12.62% |
| Div. Yield | 0.99% | 0.98% |
| Expense Ratio | 0.19% | 0.04% |
The iShares Russell Mid-Cap ETF (IWR) is a Mid-Cap Blend fund that is issued by iShares. It currently has 29.84B total assets under management and has yielded an average annual return of 14.15% over the past 10 years. The fund has a dividend yield of 0.99% 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%.
IWR’s dividend yield is 0.01% higher than that of SCHA (0.99% vs. 0.98%). Also, IWR yielded on average 1.53% more per year over the past decade (14.15% vs. 12.62%). The expense ratio of IWR is 0.15 percentage points higher than SCHA’s (0.19% vs. 0.04%).
Fund Composition
Industry Exposure
| IWR | SCHA | |
| Technology | 19.67% | 14.91% |
| Industrials | 14.54% | 15.37% |
| Energy | 3.48% | 3.35% |
| Communication Services | 4.64% | 3.5% |
| Utilities | 4.46% | 1.83% |
| Healthcare | 11.76% | 16.5% |
| Consumer Defensive | 3.82% | 3.75% |
| Real Estate | 8.31% | 7.83% |
| Financial Services | 11.64% | 14.49% |
| Consumer Cyclical | 13.59% | 14.48% |
| Basic Materials | 4.1% | 3.98% |
The iShares Russell Mid-Cap ETF (IWR) has the most exposure to the Technology sector at 19.67%. This is followed by Industrials and Consumer Cyclical at 14.54% and 13.59% respectively. Consumer Defensive (3.82%), Basic Materials (4.1%), and Utilities (4.46%) only make up 12.38% of the fund’s total assets.
IWR’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Healthcare, and Consumer Cyclical stocks at 4.64%, 8.31%, 11.64%, 11.76%, and 13.59%.
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%.
IWR is 4.76% more exposed to the Technology sector than SCHA (19.67% vs 14.91%). IWR’s exposure to Industrials and Consumer Cyclical stocks is 0.83% lower and 0.89% lower respectively (14.54% vs. 15.37% and 13.59% vs. 14.48%). In total, Consumer Defensive, Basic Materials, and Utilities also make up 2.82% more of the fund’s holdings compared to SCHA (12.38% vs. 9.56%).
Holdings
| IWR Holdings | Weight |
| IDEXX Laboratories Inc | 0.51% |
| DocuSign Inc | 0.51% |
| Twitter Inc | 0.48% |
| Chipotle Mexican Grill Inc | 0.47% |
| Roku Inc Class A | 0.44% |
| Marvell Technology Inc | 0.44% |
| DexCom Inc | 0.44% |
| Trane Technologies PLC | 0.43% |
| MSCI Inc | 0.43% |
| Carrier Global Corp Ordinary Shares | 0.43% |
IWR’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Twitter Inc, Chipotle Mexican Grill Inc, and Roku Inc Class A at 0.51%, 0.51%, 0.48%, 0.47%, and 0.44%.
Marvell Technology Inc (0.44%), DexCom Inc (0.44%), and Trane Technologies PLC (0.43%) have a slightly smaller but still significant weight. MSCI Inc and Carrier Global Corp Ordinary Shares are also represented in the IWR’s holdings at 0.43% and 0.43%.
| 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
| IWR | SCHA | |
| Mean Return | 1.17 | 1.14 |
| R-squared | 91.52 | 82.26 |
| Std. Deviation | 15.66 | 18.68 |
| Alpha | -2.8 | -4.65 |
| Beta | 1.11 | 1.25 |
| Sharpe Ratio | 0.86 | 0.7 |
| Treynor Ratio | 11.72 | 9.62 |
The iShares Russell Mid-Cap ETF (IWR) has a Mean Return of 1.17 with a R-squared of 91.52 and a Standard Deviation of 15.66. Its Alpha is -2.8 while IWR’s Sharpe Ratio is 0.86. Furthermore, the fund has a Beta of 1.11 and a Treynor Ratio of 11.72.
The Schwab U.S. Small-Cap ETF (SCHA) has a Sharpe Ratio of 0.7 with a Beta of 1.25 and a Mean Return of 1.14. Its Treynor Ratio is 9.62 while SCHA’s Standard Deviation is 18.68. Furthermore, the fund has a R-squared of 82.26 and a Alpha of -4.65.
IWR’s Mean Return is 0.03 points higher than that of SCHA and its R-squared is 9.26 points higher. With a Standard Deviation of 15.66, IWR is slightly less volatile than SCHA. The Alpha and Beta of IWR are 1.85 points higher and 0.14 points lower than SCHA’s Alpha and Beta.
Performance
Annual Returns
| Year | IWR | SCHA |
| 2020 | 16.91% | 19.35% |
| 2019 | 30.31% | 26.54% |
| 2018 | -9.13% | -11.75% |
| 2017 | 18.32% | 15.04% |
| 2016 | 13.58% | 19.88% |
| 2015 | -2.57% | -4.24% |
| 2014 | 13.03% | 6.53% |
| 2013 | 34.5% | 39.59% |
| 2012 | 17.13% | 18.24% |
| 2011 | -1.67% | -2.95% |
| 2010 | 25.25% | 28.31% |
IWR had its best year in 2013 with an annual return of 34.5%. IWR’s worst year over the past decade yielded -9.13% and occurred in 2018. In most years the iShares Russell Mid-Cap ETF provided moderate returns such as in 2016, 2020, and 2012 where annual returns amounted to 13.58%, 16.91%, and 17.13% 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 |
| IWR | $10,000 | $31,737 | 14.15% |
| SCHA | $10,000 | $30,035 | 12.62% |
A $10,000 investment in IWR would have resulted in a final balance of $31,737. This is a profit of $21,737 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.15%.
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%.
IWR’s CAGR is 1.53 percentage points higher than that of SCHA and as a result, would have yielded $1,702 more on a $10,000 investment. Thus, IWR outperformed SCHA by 1.53% annually.
Current recommendations:
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.
I believe that money is just a means to an end: to be free to spend your time as you wish, to maximize your positive impact on the world.
