JPST vs. SCHA: What’s The Difference?

The JPMorgan Ultra-Short Income ETF (JPST) and the Schwab U.S. Small-Cap ETF (SCHA) are both among the Top 100 ETFs. JPST is a JPMorgan Ultrashort Bond fund and SCHA is a Schwab ETFs Small Blend fund. So, what’s the difference between JPST and SCHA? And which fund is better?

The expense ratio of JPST is 0.14 percentage points higher than SCHA’s (0.18% vs. 0.04%). JPST is mostly comprised of A bonds while SCHA has a high exposure to the healthcare sector. Overall, JPST has provided lower returns than SCHA over the past 3 years.

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

Summary

JPST SCHA
Name JPMorgan Ultra-Short Income ETF Schwab U.S. Small-Cap ETF
Category Ultrashort Bond Small Blend
Issuer JPMorgan Schwab ETFs
AUM 17.32B 16.51B
Avg. Return 2.57% 12.62%
Div. Yield 0.94% 0.98%
Expense Ratio 0.18% 0.04%

The JPMorgan Ultra-Short Income ETF (JPST) is a Ultrashort Bond fund that is issued by JPMorgan. It currently has 17.32B total assets under management and has yielded an average annual return of 2.57% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.18%.

The Schwab U.S. Small-Cap ETF (SCHA) is a Small Blend fund that is issued by Schwab ETFs. It currently has 16.51B total assets under management and has yielded an average annual return of 12.62% over the past 10 years. The fund has a dividend yield of 0.98% with an expense ratio of 0.04%.

JPST’s dividend yield is 0.04% lower than that of SCHA (0.94% vs. 0.98%). Also, JPST yielded on average 10.05% less per year over the past decade (2.57% vs. 12.62%). The expense ratio of JPST is 0.14 percentage points higher than SCHA’s (0.18% vs. 0.04%).

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Fund Composition

Holdings

JPST - Holdings

JPST Bond Sectors Weight
A 39.21%
BBB 36.75%
AAA 14.9%
AA 9.14%
Others 0.0%
Below B 0.0%
B 0.0%
BB 0.0%
US Government 0.0%

JPST’s Top Bond Sectors are ratings of A, BBB, AAA, AA, and Others at 39.21%, 36.75%, 14.9%, 9.14%, and 0.0%. The fund is less weighted towards Below B (0.0%), B (0.0%), and BB (0.0%) rated bonds.

SCHA - Holdings

SCHA Holdings Weight
AMC Entertainment Holdings Inc Class A 0.67%
Caesars Entertainment Inc 0.51%
Cloudflare Inc 0.48%
NovoCure Ltd 0.45%
Plug Power Inc 0.41%
10x Genomics Inc Ordinary Shares – Class A 0.34%
GameStop Corp Class A 0.28%
RH 0.27%
Penn National Gaming Inc 0.27%
Axon Enterprise Inc 0.27%

SCHA’s Top Holdings are AMC Entertainment Holdings Inc Class A, Caesars Entertainment Inc, Cloudflare Inc, NovoCure Ltd, and Plug Power Inc at 0.67%, 0.51%, 0.48%, 0.45%, and 0.41%.

10x Genomics Inc Ordinary Shares – Class A (0.34%), GameStop Corp Class A (0.28%), and RH (0.27%) have a slightly smaller but still significant weight. Penn National Gaming Inc and Axon Enterprise Inc are also represented in the SCHA’s holdings at 0.27% and 0.27%.

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Risk Analysis

JPST SCHA
Mean Return 0 1.14
R-squared 0 82.26
Std. Deviation 0 18.68
Alpha 0 -4.65
Beta 0 1.25
Sharpe Ratio 0 0.7
Treynor Ratio 0 9.62

The JPMorgan Ultra-Short Income ETF (JPST) has a Standard Deviation of 0 with a Alpha of 0 and a Sharpe Ratio of 0. Its Beta is 0 while JPST’s R-squared is 0. Furthermore, the fund has a Mean Return of 0 and a Treynor Ratio of 0.

The Schwab U.S. Small-Cap ETF (SCHA) has a Sharpe Ratio of 0.7 with a Beta of 1.25 and a Standard Deviation of 18.68. Its Alpha is -4.65 while SCHA’s Mean Return is 1.14. Furthermore, the fund has a R-squared of 82.26 and a Treynor Ratio of 9.62.

JPST’s Mean Return is 1.14 points lower than that of SCHA and its R-squared is 82.26 points lower. With a Standard Deviation of 0, JPST is slightly less volatile than SCHA. The Alpha and Beta of JPST are 4.65 points higher and 1.25 points lower than SCHA’s Alpha and Beta.

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Performance

Annual Returns

JPST vs. SCHA - Annual Returns

Year JPST SCHA
2020 2.17% 19.35%
2019 3.36% 26.54%
2018 2.19% -11.75%
2017 0.0% 15.04%
2016 0.0% 19.88%
2015 0.0% -4.24%
2014 0.0% 6.53%
2013 0.0% 39.59%
2012 0.0% 18.24%
2011 0.0% -2.95%
2010 0.0% 28.31%

JPST had its best year in 2019 with an annual return of 3.36%. JPST’s worst year over the past decade yielded 0.0% and occurred in 2017. In most years the JPMorgan Ultra-Short Income ETF provided moderate returns such as in 2013, 2012, and 2011 where annual returns amounted to 0.0%, 0.0%, and 0.0% respectively.

The year 2013 was the strongest year for SCHA, returning 39.59% on an annual basis. The poorest year for SCHA in the last ten years was 2018, with a yield of -11.75%. Most years the Schwab U.S. Small-Cap ETF has given investors modest returns, such as in 2017, 2012, and 2020, when gains were 15.04%, 18.24%, and 19.35% respectively.

Portfolio Growth

JPST vs. SCHA - Portfolio Growth

Fund Initial Balance Final Balance CAGR
JPST $10,000 $10,791 2.57%
SCHA $10,000 $13,327 12.62%

A $10,000 investment in JPST would have resulted in a final balance of $10,791. This is a profit of $791 over 3 years and amounts to a compound annual growth rate (CAGR) of 2.57%.

With a $10,000 investment in SCHA, the end total would have been $13,327. This equates to a $3,327 profit over 3 years and a compound annual growth rate (CAGR) of 12.62%.

JPST’s CAGR is 10.05 percentage points lower than that of SCHA and as a result, would have yielded $2,536 less on a $10,000 investment. Thus, JPST performed worse than SCHA by 10.05% annually.


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