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SCHA vs. IWP: What’s The Difference?

The Schwab U.S. Small-Cap ETF (SCHA) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. SCHA is a Schwab ETFs Small Blend fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between SCHA and IWP? And which fund is better?

The expense ratio of SCHA is 0.20 percentage points lower than IWP’s (0.04% vs. 0.24%). SCHA also has a lower exposure to the healthcare sector and a higher standard deviation. Overall, SCHA has provided lower returns than IWP over the past 10 years.

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

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Summary

SCHAIWP
NameSchwab U.S. Small-Cap ETFiShares Russell Mid-Cap Growth ETF
CategorySmall BlendMid-Cap Growth
IssuerSchwab ETFsiShares
AUM16.51B15.7B
Avg. Return12.62%16.75%
Div. Yield0.98%0.26%
Expense Ratio0.04%0.24%

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 Russell Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.

SCHA’s dividend yield is 0.72% higher than that of IWP (0.98% vs. 0.26%). Also, SCHA yielded on average 4.13% less per year over the past decade (12.62% vs. 16.75%). The expense ratio of SCHA is 0.20 percentage points lower than IWP’s (0.04% vs. 0.24%).

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Fund Composition

Industry Exposure

SCHA vs. IWP - Industry Exposure

SCHAIWP
Technology14.91%33.88%
Industrials15.37%14.09%
Energy3.35%1.51%
Communication Services3.5%6.32%
Utilities1.83%0.16%
Healthcare16.5%16.79%
Consumer Defensive3.75%2.32%
Real Estate7.83%2.46%
Financial Services14.49%4.52%
Consumer Cyclical14.48%16.09%
Basic Materials3.98%1.86%

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 Russell Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.

IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.

SCHA is 0.29% less exposed to the Healthcare sector than IWP (16.5% vs 16.79%). SCHA’s exposure to Industrials and Technology stocks is 1.28% higher and 18.97% lower respectively (15.37% vs. 14.09% and 14.91% vs. 33.88%). In total, Energy, Communication Services, and Consumer Defensive also make up 0.45% more of the fund’s holdings compared to IWP (10.60% vs. 10.15%).

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%.

IWP - Holdings

IWP HoldingsWeight
IDEXX Laboratories Inc1.3%
DocuSign Inc1.3%
Roku Inc Class A1.29%
Match Group Inc1.06%
Chipotle Mexican Grill Inc1.06%
Pinterest Inc1.05%
Veeva Systems Inc Class A1.04%
Palantir Technologies Inc Ordinary Shares – Class A1.04%
Lululemon Athletica Inc1.01%
DexCom Inc1.0%

IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.

Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.

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Risk Analysis

SCHAIWP
Mean Return1.141.27
R-squared82.2687.01
Std. Deviation18.6816.05
Alpha-4.65-1.03
Beta1.251.1
Sharpe Ratio0.70.91
Treynor Ratio9.6212.98

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

The iShares Russell Mid-Cap Growth ETF (IWP) has a Beta of 1.1 with a R-squared of 87.01 and a Standard Deviation of 16.05. Its Alpha is -1.03 while IWP’s Mean Return is 1.27. Furthermore, the fund has a Treynor Ratio of 12.98 and a Sharpe Ratio of 0.91.

SCHA’s Mean Return is 0.13 points lower than that of IWP and its R-squared is 4.75 points lower. With a Standard Deviation of 18.68, SCHA is slightly more volatile than IWP. The Alpha and Beta of SCHA are 3.62 points lower and 0.15 points higher than IWP’s Alpha and Beta.

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Performance

Annual Returns

SCHA vs. IWP - Annual Returns

YearSCHAIWP
202019.35%35.29%
201926.54%35.14%
2018-11.75%-4.95%
201715.04%24.98%
201619.88%7.15%
2015-4.24%-0.39%
20146.53%11.68%
201339.59%35.44%
201218.24%15.62%
2011-2.95%-1.82%
201028.31%26.1%

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 IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.

Portfolio Growth

SCHA vs. IWP - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
SCHA$10,000$30,03512.62%
IWP$10,000$39,80216.75%

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 IWP, the end total would have been $39,802. This equates to a $29,802 profit over 10 years and a compound annual growth rate (CAGR) of 16.75%.

SCHA’s CAGR is 4.13 percentage points lower than that of IWP and as a result, would have yielded $9,767 less on a $10,000 investment. Thus, SCHA performed worse than IWP by 4.13% annually.


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