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SCHA vs. DFAC: What’s The Difference?

The Schwab U.S. Small-Cap ETF (SCHA) and the Dimensional U.S. Core Equity 2 ETF (DFAC) are both among the Top 100 ETFs. SCHA is a Schwab ETFs Small Blend fund and DFAC is a Dimensional Fund Advisors Large Blend fund. So, what’s the difference between SCHA and DFAC? And which fund is better?

The expense ratio of SCHA is 0.15 percentage points lower than DFAC’s (0.04% vs. 0.19%). SCHA also has a higher exposure to the healthcare sector and a higher standard deviation. Overall, SCHA has provided lower returns than DFAC over the past 10 years.

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

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Summary

SCHADFAC
NameSchwab U.S. Small-Cap ETFDimensional U.S. Core Equity 2 ETF
CategorySmall BlendLarge Blend
IssuerSchwab ETFsDimensional Fund Advisors
AUM16.51B13.53B
Avg. Return12.62%13.93%
Div. Yield0.98%1.0%
Expense Ratio0.04%0.19%

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%.

The Dimensional U.S. Core Equity 2 ETF (DFAC) is a Large Blend fund that is issued by Dimensional Fund Advisors. It currently has 13.53B total assets under management and has yielded an average annual return of 13.93% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.19%.

SCHA’s dividend yield is 0.02% lower than that of DFAC (0.98% vs. 1.0%). Also, SCHA yielded on average 1.31% less per year over the past decade (12.62% vs. 13.93%). The expense ratio of SCHA is 0.15 percentage points lower than DFAC’s (0.04% vs. 0.19%).

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Fund Composition

Industry Exposure

SCHA vs. DFAC - Industry Exposure

SCHADFAC
Technology14.91%22.81%
Industrials15.37%14.13%
Energy3.35%2.67%
Communication Services3.5%7.63%
Utilities1.83%1.54%
Healthcare16.5%12.09%
Consumer Defensive3.75%5.94%
Real Estate7.83%0.37%
Financial Services14.49%16.17%
Consumer Cyclical14.48%13.09%
Basic Materials3.98%3.56%

The Schwab U.S. Small-Cap ETF (SCHA) has the most exposure to the Healthcare sector at 16.5%. This is followed by Industrials and Technology at 15.37% and 14.91% respectively. Energy (3.35%), Communication Services (3.5%), and Consumer Defensive (3.75%) only make up 10.60% of the fund’s total assets.

SCHA’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Technology stocks at 3.98%, 7.83%, 14.48%, 14.49%, and 14.91%.

The Dimensional U.S. Core Equity 2 ETF (DFAC) has the most exposure to the Technology sector at 22.81%. This is followed by Financial Services and Industrials at 16.17% and 14.13% respectively. Utilities (1.54%), Energy (2.67%), and Basic Materials (3.56%) only make up 7.77% of the fund’s total assets.

DFAC’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Healthcare, Consumer Cyclical, and Industrials stocks at 5.94%, 7.63%, 12.09%, 13.09%, and 14.13%.

SCHA is 4.41% more exposed to the Healthcare sector than DFAC (16.5% vs 12.09%). SCHA’s exposure to Industrials and Technology stocks is 1.24% higher and 7.90% lower respectively (15.37% vs. 14.13% and 14.91% vs. 22.81%). In total, Energy, Communication Services, and Consumer Defensive also make up 5.64% less of the fund’s holdings compared to DFAC (10.60% vs. 16.24%).

Holdings

SCHA - Holdings

SCHA HoldingsWeight
AMC Entertainment Holdings Inc Class A0.67%
Caesars Entertainment Inc0.51%
Cloudflare Inc0.48%
NovoCure Ltd0.45%
Plug Power Inc0.41%
10x Genomics Inc Ordinary Shares – Class A0.34%
GameStop Corp Class A0.28%
RH0.27%
Penn National Gaming Inc0.27%
Axon Enterprise Inc0.27%

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%.

DFAC - Holdings

DFAC HoldingsWeight
Apple Inc4.7%
Microsoft Corp3.81%
Amazon.com Inc2.39%
Johnson & Johnson1.05%
Facebook Inc Class A1.05%
JPMorgan Chase & Co1.0%
Alphabet Inc Class C0.85%
Alphabet Inc Class A0.84%
Berkshire Hathaway Inc Class B0.75%
Visa Inc Class A0.74%

DFAC’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Johnson & Johnson, and Facebook Inc Class A at 4.7%, 3.81%, 2.39%, 1.05%, and 1.05%.

JPMorgan Chase & Co (1.0%), Alphabet Inc Class C (0.85%), and Alphabet Inc Class A (0.84%) have a slightly smaller but still significant weight. Berkshire Hathaway Inc Class B and Visa Inc Class A are also represented in the DFAC’s holdings at 0.75% and 0.74%.

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Risk Analysis

SCHADFAC
Mean Return1.141.19
R-squared82.2695.1
Std. Deviation18.6815.55
Alpha-4.65-2.75
Beta1.251.12
Sharpe Ratio0.70.88
Treynor Ratio9.6211.85

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

The Dimensional U.S. Core Equity 2 ETF (DFAC) has a Treynor Ratio of 11.85 with a Alpha of -2.75 and a R-squared of 95.1. Its Mean Return is 1.19 while DFAC’s Sharpe Ratio is 0.88. Furthermore, the fund has a Beta of 1.12 and a Standard Deviation of 15.55.

SCHA’s Mean Return is 0.05 points lower than that of DFAC and its R-squared is 12.84 points lower. With a Standard Deviation of 18.68, SCHA is slightly more volatile than DFAC. The Alpha and Beta of SCHA are 1.90 points lower and 0.13 points higher than DFAC’s Alpha and Beta.

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Performance

Annual Returns

SCHA vs. DFAC - Annual Returns

YearSCHADFAC
202019.35%15.8%
201926.54%29.54%
2018-11.75%-9.43%
201715.04%18.82%
201619.88%16.31%
2015-4.24%-2.53%
20146.53%9.56%
201339.59%37.55%
201218.24%17.93%
2011-2.95%-1.96%
201028.31%21.67%

SCHA had its best year in 2013 with an annual return of 39.59%. SCHA’s worst year over the past decade yielded -11.75% and occurred in 2018. In most years the Schwab U.S. Small-Cap ETF provided moderate returns such as in 2017, 2012, and 2020 where annual returns amounted to 15.04%, 18.24%, and 19.35% respectively.

The year 2013 was the strongest year for DFAC, returning 37.55% on an annual basis. The poorest year for DFAC in the last ten years was 2018, with a yield of -9.43%. Most years the Dimensional U.S. Core Equity 2 ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 15.8%, 16.31%, and 17.93% respectively.

Portfolio Growth

SCHA vs. DFAC - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
SCHA$10,000$30,03512.62%
DFAC$10,000$31,88713.93%

A $10,000 investment in SCHA would have resulted in a final balance of $30,035. This is a profit of $20,035 over 10 years and amounts to a compound annual growth rate (CAGR) of 12.62%.

With a $10,000 investment in DFAC, the end total would have been $31,887. This equates to a $21,887 profit over 10 years and a compound annual growth rate (CAGR) of 13.93%.

SCHA’s CAGR is 1.31 percentage points lower than that of DFAC and as a result, would have yielded $1,852 less on a $10,000 investment. Thus, SCHA performed worse than DFAC by 1.31% annually.


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