The iShares Russell Mid-Cap ETF (IWR) and the Schwab U.S. TIPS ETF (SCHP) are both among the Top 100 ETFs. IWR is a iShares Mid-Cap Blend fund and SCHP is a Schwab ETFs Inflation-Protected Bond fund. So, what’s the difference between IWR and SCHP? And which fund is better?
The expense ratio of IWR is 0.14 percentage points higher than SCHP’s (0.19% vs. 0.05%). IWR also has a high exposure to the technology sector while SCHP is mostly comprised of AAA bonds. Overall, IWR has provided higher returns than SCHP over the past ten years.
In this article, we’ll compare IWR vs. SCHP. We’ll look at fund composition and portfolio growth, as well as at their performance and annual returns. Moreover, I’ll also discuss IWR’s and SCHP’s holdings, risk metrics, and industry exposure and examine how these affect their overall returns.
Summary
| IWR | SCHP | |
| Name | iShares Russell Mid-Cap ETF | Schwab U.S. TIPS ETF |
| Category | Mid-Cap Blend | Inflation-Protected Bond |
| Issuer | iShares | Schwab ETFs |
| AUM | 29.84B | 18.41B |
| Avg. Return | 14.15% | 3.92% |
| Div. Yield | 0.99% | 1.97% |
| Expense Ratio | 0.19% | 0.05% |
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. 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%.
IWR’s dividend yield is 0.98% lower than that of SCHP (0.99% vs. 1.97%). Also, IWR yielded on average 10.24% more per year over the past decade (14.15% vs. 3.92%). The expense ratio of IWR is 0.14 percentage points higher than SCHP’s (0.19% vs. 0.05%).
Fund Composition
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%.
| SCHP Bond Sectors | Weight |
| AAA | 100.0% |
| Others | 0.0% |
| Below B | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| BBB | 0.0% |
| A | 0.0% |
| AA | 0.0% |
| US Government | 0.0% |
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.
Risk Analysis
| IWR | SCHP | |
| Mean Return | 1.17 | 0.28 |
| R-squared | 91.52 | 66.16 |
| Std. Deviation | 15.66 | 4.32 |
| Alpha | -2.8 | -0.5 |
| Beta | 1.11 | 1.17 |
| Sharpe Ratio | 0.86 | 0.64 |
| Treynor Ratio | 11.72 | 2.31 |
The iShares Russell Mid-Cap ETF (IWR) has a Alpha of -2.8 with a Mean Return of 1.17 and a Treynor Ratio of 11.72. Its Standard Deviation is 15.66 while IWR’s Beta is 1.11. Furthermore, the fund has a Sharpe Ratio of 0.86 and a R-squared of 91.52.
The Schwab U.S. TIPS ETF (SCHP) has a Sharpe Ratio of 0.64 with a Beta of 1.17 and a Alpha of -0.5. Its Standard Deviation is 4.32 while SCHP’s Mean Return is 0.28. Furthermore, the fund has a R-squared of 66.16 and a Treynor Ratio of 2.31.
IWR’s Mean Return is 0.89 points higher than that of SCHP and its R-squared is 25.36 points higher. With a Standard Deviation of 15.66, IWR is slightly more volatile than SCHP. The Alpha and Beta of IWR are 2.30 points lower and 0.06 points lower than SCHP’s Alpha and Beta.
Performance
Annual Returns
| Year | IWR | SCHP |
| 2020 | 16.91% | 10.94% |
| 2019 | 30.31% | 8.36% |
| 2018 | -9.13% | -1.31% |
| 2017 | 18.32% | 2.95% |
| 2016 | 13.58% | 4.6% |
| 2015 | -2.57% | -1.5% |
| 2014 | 13.03% | 3.56% |
| 2013 | 34.5% | -8.66% |
| 2012 | 17.13% | 6.83% |
| 2011 | -1.67% | 13.38% |
| 2010 | 25.25% | 0.0% |
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 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.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IWR | $10,000 | $31,737 | 14.15% |
| SCHP | $10,000 | $14,418 | 3.92% |
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 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%.
IWR’s CAGR is 10.24 percentage points higher than that of SCHP and as a result, would have yielded $17,319 more on a $10,000 investment. Thus, IWR outperformed SCHP by 10.24% annually.
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