The Schwab U.S. Broad Market ETF (SCHB) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. SCHB is a Schwab ETFs Large Blend fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between SCHB and EFV? And which fund is better?
The expense ratio of SCHB is 0.36 percentage points lower than EFV’s (0.03% vs. 0.39%). SCHB also has a higher exposure to the technology sector and a lower standard deviation. Overall, SCHB has provided higher returns than EFV over the past 10 years.
In this article, we’ll compare SCHB vs. EFV. We’ll look at holdings and performance, as well as at their fund composition and annual returns. Moreover, I’ll also discuss SCHB’s and EFV’s industry exposure, risk metrics, and portfolio growth and examine how these affect their overall returns.
Summary
| SCHB | EFV | |
| Name | Schwab U.S. Broad Market ETF | iShares MSCI EAFE Value ETF |
| Category | Large Blend | Foreign Large Value |
| Issuer | Schwab ETFs | iShares |
| AUM | 21.44B | 14.37B |
| Avg. Return | 14.43% | 3.99% |
| Div. Yield | 1.39% | 2.94% |
| Expense Ratio | 0.03% | 0.39% |
The Schwab U.S. Broad Market ETF (SCHB) is a Large Blend fund that is issued by Schwab ETFs. It currently has 21.44B total assets under management and has yielded an average annual return of 14.43% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.03%.
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%.
SCHB’s dividend yield is 1.55% lower than that of EFV (1.39% vs. 2.94%). Also, SCHB yielded on average 10.44% more per year over the past decade (14.43% vs. 3.99%). The expense ratio of SCHB is 0.36 percentage points lower than EFV’s (0.03% vs. 0.39%).
Fund Composition
Industry Exposure
| SCHB | EFV | |
| Technology | 24.15% | 2.98% |
| Industrials | 9.29% | 11.6% |
| Energy | 2.78% | 6.6% |
| Communication Services | 10.52% | 6.46% |
| Utilities | 2.32% | 6.14% |
| Healthcare | 13.37% | 9.19% |
| Consumer Defensive | 5.76% | 6.82% |
| Real Estate | 3.58% | 5.06% |
| Financial Services | 13.88% | 26.55% |
| Consumer Cyclical | 11.9% | 9.0% |
| Basic Materials | 2.45% | 9.59% |
The Schwab U.S. Broad Market ETF (SCHB) has the most exposure to the Technology sector at 24.15%. This is followed by Financial Services and Healthcare at 13.88% and 13.37% respectively. Basic Materials (2.45%), Energy (2.78%), and Real Estate (3.58%) only make up 8.81% of the fund’s total assets.
SCHB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.76%, 9.29%, 10.52%, 11.9%, and 13.37%.
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%.
SCHB is 21.17% more exposed to the Technology sector than EFV (24.15% vs 2.98%). SCHB’s exposure to Financial Services and Healthcare stocks is 12.67% lower and 4.18% higher respectively (13.88% vs. 26.55% and 13.37% vs. 9.19%). In total, Basic Materials, Energy, and Real Estate also make up 12.44% less of the fund’s holdings compared to EFV (8.81% vs. 21.25%).
Holdings
| SCHB Holdings | Weight |
| Apple Inc | 4.86% |
| Microsoft Corp | 4.61% |
| Amazon.com Inc | 3.33% |
| Facebook Inc A | 1.88% |
| Alphabet Inc A | 1.66% |
| Alphabet Inc Class C | 1.61% |
| Berkshire Hathaway Inc Class B | 1.19% |
| Tesla Inc | 1.18% |
| NVIDIA Corp | 1.13% |
| JPMorgan Chase & Co | 1.06% |
SCHB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 4.86%, 4.61%, 3.33%, 1.88%, and 1.66%.
Alphabet Inc Class C (1.61%), Berkshire Hathaway Inc Class B (1.19%), and Tesla Inc (1.18%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHB’s holdings at 1.13% and 1.06%.
| 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%.
Risk Analysis
| SCHB | EFV | |
| Mean Return | 1.23 | 0.42 |
| R-squared | 99.33 | 92.15 |
| Std. Deviation | 14.12 | 16.53 |
| Alpha | -0.58 | -1.77 |
| Beta | 1.04 | 1.05 |
| Sharpe Ratio | 1 | 0.26 |
| Treynor Ratio | 13.58 | 2.92 |
The Schwab U.S. Broad Market ETF (SCHB) has a R-squared of 99.33 with a Mean Return of 1.23 and a Sharpe Ratio of 1. Its Standard Deviation is 14.12 while SCHB’s Alpha is -0.58. Furthermore, the fund has a Beta of 1.04 and a Treynor Ratio of 13.58.
The iShares MSCI EAFE Value ETF (EFV) has a Mean Return of 0.42 with a R-squared of 92.15 and a Sharpe Ratio of 0.26. Its Treynor Ratio is 2.92 while EFV’s Standard Deviation is 16.53. Furthermore, the fund has a Beta of 1.05 and a Alpha of -1.77.
SCHB’s Mean Return is 0.81 points higher than that of EFV and its R-squared is 7.18 points higher. With a Standard Deviation of 14.12, SCHB is slightly less volatile than EFV. The Alpha and Beta of SCHB are 1.19 points higher and 0.01 points lower than EFV’s Alpha and Beta.
Performance
Annual Returns
| Year | SCHB | EFV |
| 2020 | 20.77% | -2.78% |
| 2019 | 30.94% | 15.97% |
| 2018 | -5.25% | -14.88% |
| 2017 | 21.18% | 21.22% |
| 2016 | 12.56% | 4.87% |
| 2015 | 0.45% | -5.89% |
| 2014 | 12.67% | -5.65% |
| 2013 | 33.37% | 22.61% |
| 2012 | 16.22% | 17.52% |
| 2011 | 1.4% | -12.24% |
| 2010 | 17.1% | 3.18% |
SCHB had its best year in 2013 with an annual return of 33.37%. SCHB’s worst year over the past decade yielded -5.25% and occurred in 2018. In most years the Schwab U.S. Broad Market ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 12.67%, 16.22%, and 17.1% 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
| Fund | Initial Balance | Final Balance | CAGR |
| SCHB | $10,000 | $36,354 | 14.43% |
| EFV | $10,000 | $13,698 | 3.99% |
A $10,000 investment in SCHB would have resulted in a final balance of $36,354. This is a profit of $26,354 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.43%.
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%.
SCHB’s CAGR is 10.44 percentage points higher than that of EFV and as a result, would have yielded $22,656 more on a $10,000 investment. Thus, SCHB outperformed EFV by 10.44% annually.
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