SCHA vs. EFV: What’s The Difference?

The Schwab U.S. Small-Cap ETF (SCHA) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. SCHA is a Schwab ETFs Small Blend fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between SCHA and EFV? And which fund is better?

The expense ratio of SCHA is 0.35 percentage points lower than EFV’s (0.04% vs. 0.39%). SCHA also has a higher exposure to the healthcare sector and a higher standard deviation. Overall, SCHA has provided higher returns than EFV over the past 10 years.

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

Summary

SCHA EFV
Name Schwab U.S. Small-Cap ETF iShares MSCI EAFE Value ETF
Category Small Blend Foreign Large Value
Issuer Schwab ETFs iShares
AUM 16.51B 14.37B
Avg. Return 12.62% 3.99%
Div. Yield 0.98% 2.94%
Expense Ratio 0.04% 0.39%

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 iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.

SCHA’s dividend yield is 1.96% lower than that of EFV (0.98% vs. 2.94%). Also, SCHA yielded on average 8.63% more per year over the past decade (12.62% vs. 3.99%). The expense ratio of SCHA is 0.35 percentage points lower than EFV’s (0.04% vs. 0.39%).

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Fund Composition

Industry Exposure

SCHA vs. EFV - Industry Exposure

SCHA EFV
Technology 14.91% 2.98%
Industrials 15.37% 11.6%
Energy 3.35% 6.6%
Communication Services 3.5% 6.46%
Utilities 1.83% 6.14%
Healthcare 16.5% 9.19%
Consumer Defensive 3.75% 6.82%
Real Estate 7.83% 5.06%
Financial Services 14.49% 26.55%
Consumer Cyclical 14.48% 9.0%
Basic Materials 3.98% 9.59%

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 iShares MSCI EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.

EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.

SCHA is 7.31% more exposed to the Healthcare sector than EFV (16.5% vs 9.19%). SCHA’s exposure to Industrials and Technology stocks is 3.77% higher and 11.93% higher respectively (15.37% vs. 11.6% and 14.91% vs. 2.98%). In total, Energy, Communication Services, and Consumer Defensive also make up 9.28% less of the fund’s holdings compared to EFV (10.60% vs. 19.88%).

Holdings

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%.

EFV - Holdings

EFV Holdings Weight
Novartis AG 2.41%
Toyota Motor Corp 2.21%
Commonwealth Bank of Australia 1.59%
Siemens AG 1.45%
Sanofi SA 1.42%
HSBC Holdings PLC 1.4%
TotalEnergies SE 1.35%
Allianz SE 1.23%
GlaxoSmithKline PLC 1.18%
Rio Tinto PLC 1.1%

EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.

HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.

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Risk Analysis

SCHA EFV
Mean Return 1.14 0.42
R-squared 82.26 92.15
Std. Deviation 18.68 16.53
Alpha -4.65 -1.77
Beta 1.25 1.05
Sharpe Ratio 0.7 0.26
Treynor Ratio 9.62 2.92

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

The iShares MSCI EAFE Value ETF (EFV) has a Alpha of -1.77 with a Sharpe Ratio of 0.26 and a Mean Return of 0.42. Its R-squared is 92.15 while EFV’s Treynor Ratio is 2.92. Furthermore, the fund has a Beta of 1.05 and a Standard Deviation of 16.53.

SCHA’s Mean Return is 0.72 points higher than that of EFV and its R-squared is 9.89 points lower. With a Standard Deviation of 18.68, SCHA is slightly more volatile than EFV. The Alpha and Beta of SCHA are 2.88 points lower and 0.20 points higher than EFV’s Alpha and Beta.

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Performance

Annual Returns

SCHA vs. EFV - Annual Returns

Year SCHA EFV
2020 19.35% -2.78%
2019 26.54% 15.97%
2018 -11.75% -14.88%
2017 15.04% 21.22%
2016 19.88% 4.87%
2015 -4.24% -5.89%
2014 6.53% -5.65%
2013 39.59% 22.61%
2012 18.24% 17.52%
2011 -2.95% -12.24%
2010 28.31% 3.18%

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 EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.

Portfolio Growth

SCHA vs. EFV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHA $10,000 $30,035 12.62%
EFV $10,000 $13,698 3.99%

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 EFV, the end total would have been $13,698. This equates to a $3,698 profit over 10 years and a compound annual growth rate (CAGR) of 3.99%.

SCHA’s CAGR is 8.63 percentage points higher than that of EFV and as a result, would have yielded $16,337 more on a $10,000 investment. Thus, SCHA outperformed EFV by 8.63% annually.


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