The iShares Core MSCI Total International Stock ETF (IXUS) and the Schwab U.S. TIPS ETF (SCHP) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and SCHP is a Schwab ETFs Inflation-Protected Bond fund. So, what’s the difference between IXUS and SCHP? And which fund is better?
The expense ratio of IXUS is 0.04 percentage points higher than SCHP’s (0.09% vs. 0.05%). IXUS also has a high exposure to the financial services sector while SCHP is mostly comprised of AAA bonds. Overall, IXUS has provided higher returns than SCHP over the past ten years.
In this article, we’ll compare IXUS vs. SCHP. We’ll look at holdings and fund composition, as well as at their performance and industry exposure. Moreover, I’ll also discuss IXUS’s and SCHP’s annual returns, risk metrics, and portfolio growth and examine how these affect their overall returns.
|Name||iShares Core MSCI Total International Stock ETF||Schwab U.S. TIPS ETF|
|Category||Foreign Large Blend||Inflation-Protected Bond|
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. 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%.
IXUS’s dividend yield is 0.16% higher than that of SCHP (2.13% vs. 1.97%). Also, IXUS yielded on average 2.17% more per year over the past decade (6.09% vs. 3.92%). The expense ratio of IXUS is 0.04 percentage points higher than SCHP’s (0.09% vs. 0.05%).
|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%.
|SCHP Bond Sectors||Weight|
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.
The iShares Core MSCI Total International Stock ETF (IXUS) has a Treynor Ratio of 0 with a Mean Return of 0 and a Standard Deviation of 0. Its Alpha is 0 while IXUS’s Beta is 0. Furthermore, the fund has a R-squared of 0 and a Sharpe Ratio of 0.
The Schwab U.S. TIPS ETF (SCHP) has a Treynor Ratio of 2.31 with a Mean Return of 0.28 and a Alpha of -0.5. Its Beta is 1.17 while SCHP’s Sharpe Ratio is 0.64. Furthermore, the fund has a R-squared of 66.16 and a Standard Deviation of 4.32.
IXUS’s Mean Return is 0.28 points lower than that of SCHP and its R-squared is 66.16 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than SCHP. The Alpha and Beta of IXUS are 0.50 points higher and 1.17 points lower than SCHP’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 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.
|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 SCHP, the end total would have been $13,032. This equates to a $3,032 profit over 7 years and a compound annual growth rate (CAGR) of 3.92%.
IXUS’s CAGR is 2.17 percentage points higher than that of SCHP and as a result, would have yielded $1,177 more on a $10,000 investment. Thus, IXUS outperformed SCHP by 2.17% annually.
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