SCHA vs. SCHG: What’s The Difference?

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

SCHA and SCHG have the same expense ratio: 0.04%. SCHA also has a higher exposure to the healthcare sector and a higher standard deviation. Overall, SCHA has provided lower returns than SCHG over the past 10 years.

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

Summary

SCHA SCHG
Name Schwab U.S. Small-Cap ETF Schwab U.S. Large-Cap Growth ETF
Category Small Blend Large Growth
Issuer Schwab ETFs Schwab ETFs
AUM 16.51B 15.16B
Avg. Return 12.62% 17.81%
Div. Yield 0.98% 0.43%
Expense Ratio 0.04% 0.04%

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 Schwab U.S. Large-Cap Growth ETF (SCHG) is a Large Growth fund that is issued by Schwab ETFs. It currently has 15.16B total assets under management and has yielded an average annual return of 17.81% over the past 10 years. The fund has a dividend yield of 0.43% with an expense ratio of 0.04%.

SCHA’s dividend yield is 0.55% higher than that of SCHG (0.98% vs. 0.43%). Also, SCHA yielded on average 5.19% less per year over the past decade (12.62% vs. 17.81%). SCHA and SCHG have the same expense ratio: 0.04%.

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Fund Composition

Industry Exposure

SCHA vs. SCHG - Industry Exposure

SCHA SCHG
Technology 14.91% 39.21%
Industrials 15.37% 3.01%
Energy 3.35% 0.2%
Communication Services 3.5% 17.07%
Utilities 1.83% 0.0%
Healthcare 16.5% 12.05%
Consumer Defensive 3.75% 2.15%
Real Estate 7.83% 1.64%
Financial Services 14.49% 7.98%
Consumer Cyclical 14.48% 15.01%
Basic Materials 3.98% 1.68%

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 Schwab U.S. Large-Cap Growth ETF (SCHG) has the most exposure to the Technology sector at 39.21%. This is followed by Communication Services and Consumer Cyclical at 17.07% and 15.01% respectively. Energy (0.2%), Real Estate (1.64%), and Basic Materials (1.68%) only make up 3.52% of the fund’s total assets.

SCHG’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 2.15%, 3.01%, 7.98%, 12.05%, and 15.01%.

SCHA is 4.45% more exposed to the Healthcare sector than SCHG (16.5% vs 12.05%). SCHA’s exposure to Industrials and Technology stocks is 12.36% higher and 24.30% lower respectively (15.37% vs. 3.01% and 14.91% vs. 39.21%). In total, Energy, Communication Services, and Consumer Defensive also make up 8.82% less of the fund’s holdings compared to SCHG (10.60% vs. 19.42%).

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%.

SCHG - Holdings

SCHG Holdings Weight
Apple Inc 11.49%
Microsoft Corp 10.91%
Amazon.com Inc 7.89%
Facebook Inc A 4.45%
Alphabet Inc A 3.93%
Alphabet Inc Class C 3.82%
Tesla Inc 2.8%
NVIDIA Corp 2.67%
Visa Inc Class A 2.12%
UnitedHealth Group Inc 2.02%

SCHG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 11.49%, 10.91%, 7.89%, 4.45%, and 3.93%.

Alphabet Inc Class C (3.82%), Tesla Inc (2.8%), and NVIDIA Corp (2.67%) have a slightly smaller but still significant weight. Visa Inc Class A and UnitedHealth Group Inc are also represented in the SCHG’s holdings at 2.12% and 2.02%.

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Risk Analysis

SCHA SCHG
Mean Return 1.14 1.46
R-squared 82.26 92.92
Std. Deviation 18.68 14.78
Alpha -4.65 1.97
Beta 1.25 1.05
Sharpe Ratio 0.7 1.14
Treynor Ratio 9.62 16.3

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

The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Treynor Ratio of 16.3 with a Mean Return of 1.46 and a Beta of 1.05. Its Alpha is 1.97 while SCHG’s Standard Deviation is 14.78. Furthermore, the fund has a Sharpe Ratio of 1.14 and a R-squared of 92.92.

SCHA’s Mean Return is 0.32 points lower than that of SCHG and its R-squared is 10.66 points lower. With a Standard Deviation of 18.68, SCHA is slightly more volatile than SCHG. The Alpha and Beta of SCHA are 6.62 points lower and 0.20 points higher than SCHG’s Alpha and Beta.

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Performance

Annual Returns

SCHA vs. SCHG - Annual Returns

Year SCHA SCHG
2020 19.35% 39.13%
2019 26.54% 36.21%
2018 -11.75% -1.35%
2017 15.04% 28.04%
2016 19.88% 6.76%
2015 -4.24% 3.26%
2014 6.53% 15.74%
2013 39.59% 33.96%
2012 18.24% 17.02%
2011 -2.95% -0.67%
2010 28.31% 16.83%

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 2020 was the strongest year for SCHG, returning 39.13% on an annual basis. The poorest year for SCHG in the last ten years was 2018, with a yield of -1.35%. Most years the Schwab U.S. Large-Cap Growth ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 15.74%, 16.83%, and 17.02% respectively.

Portfolio Growth

SCHA vs. SCHG - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHA $10,000 $30,035 12.62%
SCHG $10,000 $47,556 17.81%

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 SCHG, the end total would have been $47,556. This equates to a $37,556 profit over 10 years and a compound annual growth rate (CAGR) of 17.81%.

SCHA’s CAGR is 5.19 percentage points lower than that of SCHG and as a result, would have yielded $17,521 less on a $10,000 investment. Thus, SCHA performed worse than SCHG by 5.19% annually.


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