IWR vs. SCHG: What’s The Difference?

The iShares Russell Mid-Cap ETF (IWR) and the Schwab U.S. Large-Cap Growth ETF (SCHG) are both among the Top 100 ETFs. IWR is a iShares Mid-Cap Blend fund and SCHG is a Schwab ETFs Large Growth fund. So, what’s the difference between IWR and SCHG? And which fund is better?

The expense ratio of IWR is 0.15 percentage points higher than SCHG’s (0.19% vs. 0.04%). IWR also has a lower exposure to the technology sector and a higher standard deviation. Overall, IWR has provided lower returns than SCHG over the past ten years.

In this article, we’ll compare IWR vs. SCHG. We’ll look at fund composition and holdings, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss IWR’s and SCHG’s performance, industry exposure, and risk metrics and examine how these affect their overall returns.

Summary

IWR SCHG
Name iShares Russell Mid-Cap ETF Schwab U.S. Large-Cap Growth ETF
Category Mid-Cap Blend Large Growth
Issuer iShares Schwab ETFs
AUM 29.84B 15.16B
Avg. Return 14.15% 17.81%
Div. Yield 0.99% 0.43%
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. Large-Cap Growth ETF (SCHG) is a Large Growth fund that is issued by Schwab ETFs. It currently has 15.16B total assets under management and has yielded an average annual return of 17.81% over the past 10 years. The fund has a dividend yield of 0.43% with an expense ratio of 0.04%.

IWR’s dividend yield is 0.56% higher than that of SCHG (0.99% vs. 0.43%). Also, IWR yielded on average 3.66% less per year over the past decade (14.15% vs. 17.81%). The expense ratio of IWR is 0.15 percentage points higher than SCHG’s (0.19% vs. 0.04%).

Fund Composition

Industry Exposure

IWR vs. SCHG - Industry Exposure

IWR SCHG
Technology 19.67% 39.21%
Industrials 14.54% 3.01%
Energy 3.48% 0.2%
Communication Services 4.64% 17.07%
Utilities 4.46% 0.0%
Healthcare 11.76% 12.05%
Consumer Defensive 3.82% 2.15%
Real Estate 8.31% 1.64%
Financial Services 11.64% 7.98%
Consumer Cyclical 13.59% 15.01%
Basic Materials 4.1% 1.68%

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. Large-Cap Growth ETF (SCHG) has the most exposure to the Technology sector at 39.21%. This is followed by Communication Services and Consumer Cyclical at 17.07% and 15.01% respectively. Energy (0.2%), Real Estate (1.64%), and Basic Materials (1.68%) only make up 3.52% of the fund’s total assets.

SCHG’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 2.15%, 3.01%, 7.98%, 12.05%, and 15.01%.

IWR is 19.54% less exposed to the Technology sector than SCHG (19.67% vs 39.21%). IWR’s exposure to Industrials and Consumer Cyclical stocks is 11.53% higher and 1.42% lower respectively (14.54% vs. 3.01% and 13.59% vs. 15.01%). In total, Consumer Defensive, Basic Materials, and Utilities also make up 8.55% more of the fund’s holdings compared to SCHG (12.38% vs. 3.83%).

Holdings

IWR - 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%.

SCHG - Holdings

SCHG Holdings Weight
Apple Inc 11.49%
Microsoft Corp 10.91%
Amazon.com Inc 7.89%
Facebook Inc A 4.45%
Alphabet Inc A 3.93%
Alphabet Inc Class C 3.82%
Tesla Inc 2.8%
NVIDIA Corp 2.67%
Visa Inc Class A 2.12%
UnitedHealth Group Inc 2.02%

SCHG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 11.49%, 10.91%, 7.89%, 4.45%, and 3.93%.

Alphabet Inc Class C (3.82%), Tesla Inc (2.8%), and NVIDIA Corp (2.67%) have a slightly smaller but still significant weight. Visa Inc Class A and UnitedHealth Group Inc are also represented in the SCHG’s holdings at 2.12% and 2.02%.

Risk Analysis

IWR SCHG
Mean Return 1.17 1.46
R-squared 91.52 92.92
Std. Deviation 15.66 14.78
Alpha -2.8 1.97
Beta 1.11 1.05
Sharpe Ratio 0.86 1.14
Treynor Ratio 11.72 16.3

The iShares Russell Mid-Cap ETF (IWR) has a R-squared of 91.52 with a Mean Return of 1.17 and a Treynor Ratio of 11.72. Its Beta is 1.11 while IWR’s Sharpe Ratio is 0.86. Furthermore, the fund has a Alpha of -2.8 and a Standard Deviation of 15.66.

The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Standard Deviation of 14.78 with a Treynor Ratio of 16.3 and a R-squared of 92.92. Its Alpha is 1.97 while SCHG’s Mean Return is 1.46. Furthermore, the fund has a Beta of 1.05 and a Sharpe Ratio of 1.14.

IWR’s Mean Return is 0.29 points lower than that of SCHG and its R-squared is 1.40 points lower. With a Standard Deviation of 15.66, IWR is slightly more volatile than SCHG. The Alpha and Beta of IWR are 4.77 points lower and 0.06 points higher than SCHG’s Alpha and Beta.

Performance

Annual Returns

IWR vs. SCHG - Annual Returns

Year IWR SCHG
2020 16.91% 39.13%
2019 30.31% 36.21%
2018 -9.13% -1.35%
2017 18.32% 28.04%
2016 13.58% 6.76%
2015 -2.57% 3.26%
2014 13.03% 15.74%
2013 34.5% 33.96%
2012 17.13% 17.02%
2011 -1.67% -0.67%
2010 25.25% 16.83%

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 2020 was the strongest year for SCHG, returning 39.13% on an annual basis. The poorest year for SCHG in the last ten years was 2018, with a yield of -1.35%. Most years the Schwab U.S. Large-Cap Growth ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 15.74%, 16.83%, and 17.02% respectively.

Portfolio Growth

IWR vs. SCHG - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWR $10,000 $31,737 14.15%
SCHG $10,000 $47,556 17.81%

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 SCHG, the end total would have been $47,556. This equates to a $37,556 profit over 10 years and a compound annual growth rate (CAGR) of 17.81%.

IWR’s CAGR is 3.66 percentage points lower than that of SCHG and as a result, would have yielded $15,819 less on a $10,000 investment. Thus, IWR performed worse than SCHG by 3.66% annually.


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