SCHB vs. SCHG: What’s The Difference?

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

The expense ratio of SCHB is 0.01 percentage points lower than SCHG’s (0.03% vs. 0.04%). SCHB also has a lower exposure to the technology sector and a lower standard deviation. Overall, SCHB has provided lower returns than SCHG over the past 10 years.

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

Summary

SCHB SCHG
Name Schwab U.S. Broad Market ETF Schwab U.S. Large-Cap Growth ETF
Category Large Blend Large Growth
Issuer Schwab ETFs Schwab ETFs
AUM 21.44B 15.16B
Avg. Return 14.43% 17.81%
Div. Yield 1.39% 0.43%
Expense Ratio 0.03% 0.04%

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 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%.

SCHB’s dividend yield is 0.96% higher than that of SCHG (1.39% vs. 0.43%). Also, SCHB yielded on average 3.38% less per year over the past decade (14.43% vs. 17.81%). The expense ratio of SCHB is 0.01 percentage points lower than SCHG’s (0.03% vs. 0.04%).

Fund Composition

Industry Exposure

SCHB vs. SCHG - Industry Exposure

SCHB SCHG
Technology 24.15% 39.21%
Industrials 9.29% 3.01%
Energy 2.78% 0.2%
Communication Services 10.52% 17.07%
Utilities 2.32% 0.0%
Healthcare 13.37% 12.05%
Consumer Defensive 5.76% 2.15%
Real Estate 3.58% 1.64%
Financial Services 13.88% 7.98%
Consumer Cyclical 11.9% 15.01%
Basic Materials 2.45% 1.68%

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 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%.

SCHB is 15.06% less exposed to the Technology sector than SCHG (24.15% vs 39.21%). SCHB’s exposure to Financial Services and Healthcare stocks is 5.90% higher and 1.32% higher respectively (13.88% vs. 7.98% and 13.37% vs. 12.05%). In total, Basic Materials, Energy, and Real Estate also make up 5.29% more of the fund’s holdings compared to SCHG (8.81% vs. 3.52%).

Holdings

SCHB - 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%.

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%.

Risk Analysis

SCHB SCHG
Mean Return 1.23 1.46
R-squared 99.33 92.92
Std. Deviation 14.12 14.78
Alpha -0.58 1.97
Beta 1.04 1.05
Sharpe Ratio 1 1.14
Treynor Ratio 13.58 16.3

The Schwab U.S. Broad Market ETF (SCHB) has a R-squared of 99.33 with a Standard Deviation of 14.12 and a Beta of 1.04. Its Sharpe Ratio is 1 while SCHB’s Alpha is -0.58. Furthermore, the fund has a Mean Return of 1.23 and a Treynor Ratio of 13.58.

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

SCHB’s Mean Return is 0.23 points lower than that of SCHG and its R-squared is 6.41 points higher. With a Standard Deviation of 14.12, SCHB is slightly less volatile than SCHG. The Alpha and Beta of SCHB are 2.55 points lower and 0.01 points lower than SCHG’s Alpha and Beta.

Performance

Annual Returns

SCHB vs. SCHG - Annual Returns

Year SCHB SCHG
2020 20.77% 39.13%
2019 30.94% 36.21%
2018 -5.25% -1.35%
2017 21.18% 28.04%
2016 12.56% 6.76%
2015 0.45% 3.26%
2014 12.67% 15.74%
2013 33.37% 33.96%
2012 16.22% 17.02%
2011 1.4% -0.67%
2010 17.1% 16.83%

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 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

SCHB vs. SCHG - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHB $10,000 $36,354 14.43%
SCHG $10,000 $47,556 17.81%

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 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%.

SCHB’s CAGR is 3.38 percentage points lower than that of SCHG and as a result, would have yielded $11,202 less on a $10,000 investment. Thus, SCHB performed worse than SCHG by 3.38% annually.


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