The iShares Core MSCI Total International Stock ETF (IXUS) and the Schwab U.S. Broad Market ETF (SCHB) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and SCHB is a Schwab ETFs Large Blend fund. So, what’s the difference between IXUS and SCHB? And which fund is better?
The expense ratio of IXUS is 0.06 percentage points higher than SCHB’s (0.09% vs. 0.03%). IXUS also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IXUS has provided lower returns than SCHB over the past ten years.
In this article, we’ll compare IXUS vs. SCHB. We’ll look at risk metrics and performance, as well as at their industry exposure and portfolio growth. Moreover, I’ll also discuss IXUS’s and SCHB’s annual returns, fund composition, and holdings and examine how these affect their overall returns.
|Name||iShares Core MSCI Total International Stock ETF||Schwab U.S. Broad Market ETF|
|Category||Foreign Large Blend||Large Blend|
The iShares Core MSCI Total International Stock ETF (IXUS) is a Foreign Large Blend fund that is issued by iShares. It currently has 29.54B total assets under management and has yielded an average annual return of 6.09% over the past 10 years. The fund has a dividend yield of 2.13% with an expense ratio of 0.09%.
The Schwab U.S. Broad Market ETF (SCHB) is a Large Blend fund that is issued by Schwab ETFs. It currently has 21.44B total assets under management and has yielded an average annual return of 14.43% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.03%.
IXUS’s dividend yield is 0.74% higher than that of SCHB (2.13% vs. 1.39%). Also, IXUS yielded on average 8.35% less per year over the past decade (6.09% vs. 14.43%). The expense ratio of IXUS is 0.06 percentage points higher than SCHB’s (0.09% vs. 0.03%).
The iShares Core MSCI Total International Stock ETF (IXUS) has the most exposure to the Financial Services sector at 17.34%. This is followed by Technology and Industrials at 13.24% and 12.78% respectively. Real Estate (3.66%), Energy (4.39%), and Communication Services (7.09%) only make up 15.14% of the fund’s total assets.
IXUS’s mid-section with moderate exposure is comprised of Consumer Defensive, Basic Materials, Healthcare, Consumer Cyclical, and Industrials stocks at 8.19%, 8.5%, 9.29%, 12.57%, and 12.78%.
The Schwab U.S. Broad Market ETF (SCHB) has the most exposure to the Technology sector at 24.15%. This is followed by Financial Services and Healthcare at 13.88% and 13.37% respectively. Basic Materials (2.45%), Energy (2.78%), and Real Estate (3.58%) only make up 8.81% of the fund’s total assets.
SCHB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.76%, 9.29%, 10.52%, 11.9%, and 13.37%.
IXUS is 3.46% more exposed to the Financial Services sector than SCHB (17.34% vs 13.88%). IXUS’s exposure to Technology and Industrials stocks is 10.91% lower and 3.49% higher respectively (13.24% vs. 24.15% and 12.78% vs. 9.29%). In total, Real Estate, Energy, and Communication Services also make up 1.74% less of the fund’s holdings compared to SCHB (15.14% vs. 16.88%).
|Taiwan Semiconductor Manufacturing Co Ltd||1.64%|
|Tencent Holdings Ltd||1.35%|
|Alibaba Group Holding Ltd Ordinary Shares||1.34%|
|Samsung Electronics Co Ltd||1.06%|
|ASML Holding NV||0.9%|
|Roche Holding AG||0.81%|
|LVMH Moet Hennessy Louis Vuitton SE||0.67%|
|Toyota Motor Corp||0.59%|
IXUS’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, and Samsung Electronics Co Ltd at 1.64%, 1.35%, 1.34%, 1.1%, and 1.06%.
ASML Holding NV (0.9%), Roche Holding AG (0.81%), and LVMH Moet Hennessy Louis Vuitton SE (0.67%) have a slightly smaller but still significant weight. Novartis AG and Toyota Motor Corp are also represented in the IXUS’s holdings at 0.62% and 0.59%.
|Facebook Inc A||1.88%|
|Alphabet Inc A||1.66%|
|Alphabet Inc Class C||1.61%|
|Berkshire Hathaway Inc Class B||1.19%|
|JPMorgan Chase & Co||1.06%|
SCHB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 4.86%, 4.61%, 3.33%, 1.88%, and 1.66%.
Alphabet Inc Class C (1.61%), Berkshire Hathaway Inc Class B (1.19%), and Tesla Inc (1.18%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHB’s holdings at 1.13% and 1.06%.
The iShares Core MSCI Total International Stock ETF (IXUS) has a Alpha of 0 with a R-squared of 0 and a Standard Deviation of 0. Its Beta is 0 while IXUS’s Sharpe Ratio is 0. Furthermore, the fund has a Mean Return of 0 and a Treynor Ratio of 0.
The Schwab U.S. Broad Market ETF (SCHB) has a Treynor Ratio of 13.58 with a Sharpe Ratio of 1 and a Beta of 1.04. Its Mean Return is 1.23 while SCHB’s Alpha is -0.58. Furthermore, the fund has a Standard Deviation of 14.12 and a R-squared of 99.33.
IXUS’s Mean Return is 1.23 points lower than that of SCHB and its R-squared is 99.33 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than SCHB. The Alpha and Beta of IXUS are 0.58 points higher and 1.04 points lower than SCHB’s Alpha and Beta.
IXUS had its best year in 2017 with an annual return of 28.08%. IXUS’s worst year over the past decade yielded -14.55% and occurred in 2018. In most years the iShares Core MSCI Total International Stock ETF provided moderate returns such as in 2011, 2010, and 2016 where annual returns amounted to 0.0%, 0.0%, and 4.66% respectively.
The year 2013 was the strongest year for SCHB, returning 33.37% on an annual basis. The poorest year for SCHB in the last ten years was 2018, with a yield of -5.25%. Most years the Schwab U.S. Broad Market ETF has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 12.67%, 16.22%, and 17.1% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IXUS would have resulted in a final balance of $14,209. This is a profit of $4,209 over 7 years and amounts to a compound annual growth rate (CAGR) of 6.09%.
With a $10,000 investment in SCHB, the end total would have been $23,130. This equates to a $13,130 profit over 7 years and a compound annual growth rate (CAGR) of 14.43%.
IXUS’s CAGR is 8.35 percentage points lower than that of SCHB and as a result, would have yielded $8,921 less on a $10,000 investment. Thus, IXUS performed worse than SCHB by 8.35% annually.
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