The iShares Russell Mid-Cap ETF (IWR) and the Schwab U.S. Dividend Equity ETF (SCHD) are both among the Top 100 ETFs. IWR is a iShares Mid-Cap Blend fund and SCHD is a Schwab ETFs Large Value fund. So, what’s the difference between IWR and SCHD? And which fund is better?
The expense ratio of IWR is 0.13 percentage points higher than SCHD’s (0.19% vs. 0.06%). IWR also has a higher exposure to the technology sector and a higher standard deviation. Overall, IWR has provided lower returns than SCHD over the past ten years.
In this article, we’ll compare IWR vs. SCHD. We’ll look at portfolio growth and performance, as well as at their risk metrics and holdings. Moreover, I’ll also discuss IWR’s and SCHD’s industry exposure, annual returns, and fund composition and examine how these affect their overall returns.
|Name||iShares Russell Mid-Cap ETF||Schwab U.S. Dividend Equity ETF|
|Category||Mid-Cap Blend||Large Value|
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. 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%.
IWR’s dividend yield is 1.90% lower than that of SCHD (0.99% vs. 2.89%). Also, IWR yielded on average 0.65% less per year over the past decade (14.15% vs. 14.80%). The expense ratio of IWR is 0.13 percentage points higher than SCHD’s (0.19% vs. 0.06%).
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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. 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%.
IWR is 3.41% more exposed to the Technology sector than SCHD (19.67% vs 16.26%). IWR’s exposure to Industrials and Consumer Cyclical stocks is 3.51% lower and 5.23% higher respectively (14.54% vs. 18.05% and 13.59% vs. 8.36%). In total, Consumer Defensive, Basic Materials, and Utilities also make up 3.79% less of the fund’s holdings compared to SCHD (12.38% vs. 16.17%).
|IDEXX Laboratories Inc||0.51%|
|Chipotle Mexican Grill Inc||0.47%|
|Roku Inc Class A||0.44%|
|Marvell Technology Inc||0.44%|
|Trane Technologies PLC||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%.
|Merck & Co Inc||4.24%|
|The Home Depot Inc||4.19%|
|Texas Instruments Inc||4.16%|
|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%.
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The iShares Russell Mid-Cap ETF (IWR) has a R-squared of 91.52 with a Treynor Ratio of 11.72 and a Sharpe Ratio of 0.86. Its Standard Deviation is 15.66 while IWR’s Alpha is -2.8. Furthermore, the fund has a Mean Return of 1.17 and a Beta of 1.11.
The Schwab U.S. Dividend Equity ETF (SCHD) has a Sharpe Ratio of 0 with a Beta of 0 and a Mean Return of 0. Its Alpha is 0 while SCHD’s R-squared is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Standard Deviation of 0.
IWR’s Mean Return is 1.17 points higher than that of SCHD and its R-squared is 91.52 points higher. With a Standard Deviation of 15.66, IWR is slightly more volatile than SCHD. The Alpha and Beta of IWR are 2.80 points lower and 1.11 points higher than SCHD’s Alpha and Beta.
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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 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IWR would have resulted in a final balance of $27,556. This is a profit of $17,556 over 8 years and amounts to a compound annual growth rate (CAGR) of 14.15%.
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%.
IWR’s CAGR is 0.65 percentage points lower than that of SCHD and as a result, would have yielded $1,267 less on a $10,000 investment. Thus, IWR performed worse than SCHD by 0.65% annually.
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