SCHD vs. IUSB: What’s The Difference?

The Schwab U.S. Dividend Equity ETF (SCHD) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. SCHD is a Schwab ETFs Large Value fund and IUSB is a iShares N/A fund. So, what’s the difference between SCHD and IUSB? And which fund is better?

SCHD and IUSB have the same expense ratio: 0.06%. SCHD also has a high exposure to the financial services sector while IUSB is mostly comprised of AAA bonds. Overall, SCHD has provided higher returns than IUSB over the past 6 years.

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

Summary

SCHD IUSB
Name Schwab U.S. Dividend Equity ETF iShares Core Total USD Bond Market ETF
Category Large Value N/A
Issuer Schwab ETFs iShares
AUM 26B 14.49B
Avg. Return 14.80% 4.13%
Div. Yield 2.89% 2.1%
Expense Ratio 0.06% 0.06%

The Schwab U.S. Dividend Equity ETF (SCHD) is a Large Value fund that is issued by Schwab ETFs. It currently has 26B total assets under management and has yielded an average annual return of 14.80% over the past 10 years. The fund has a dividend yield of 2.89% with an expense ratio of 0.06%.

The iShares Core Total USD Bond Market ETF (IUSB) is a N/A fund that is issued by iShares. It currently has 14.49B total assets under management and has yielded an average annual return of 4.13% over the past 10 years. The fund has a dividend yield of 2.1% with an expense ratio of 0.06%.

SCHD’s dividend yield is 0.79% higher than that of IUSB (2.89% vs. 2.1%). Also, SCHD yielded on average 10.67% more per year over the past decade (14.80% vs. 4.13%). SCHD and IUSB have the same expense ratio: 0.06%.

Fund Composition

Holdings

SCHD - Holdings

SCHD Holdings Weight
Merck & Co Inc 4.24%
The Home Depot Inc 4.19%
Texas Instruments Inc 4.16%
Broadcom Inc 4.15%
Amgen Inc 4.11%
PepsiCo Inc 4.09%
BlackRock Inc 4.05%
Pfizer Inc 3.97%
Verizon Communications Inc 3.96%
Cisco Systems Inc 3.96%

SCHD’s Top Holdings are Merck & Co Inc, The Home Depot Inc, Texas Instruments Inc, Broadcom Inc, and Amgen Inc at 4.24%, 4.19%, 4.16%, 4.15%, and 4.11%.

PepsiCo Inc (4.09%), BlackRock Inc (4.05%), and Pfizer Inc (3.97%) have a slightly smaller but still significant weight. Verizon Communications Inc and Cisco Systems Inc are also represented in the SCHD’s holdings at 3.96% and 3.96%.

IUSB - Holdings

IUSB Bond Sectors Weight
AAA 58.32%
BBB 16.98%
A 12.27%
BB 4.33%
AA 3.36%
B 2.8%
Others 1.01%
Below B 0.92%
US Government 0.0%

IUSB’s Top Bond Sectors are ratings of AAA, BBB, A, BB, and AA at 58.32%, 16.98%, 12.27%, 4.33%, and 3.36%. The fund is less weighted towards B (2.8%), Others (1.01%), and Below B (0.92%) rated bonds.

Risk Analysis

SCHD IUSB
Mean Return 0 0
R-squared 0 0
Std. Deviation 0 0
Alpha 0 0
Beta 0 0
Sharpe Ratio 0 0
Treynor Ratio 0 0

The Schwab U.S. Dividend Equity ETF (SCHD) has a Alpha of 0 with a Treynor Ratio of 0 and a R-squared of 0. Its Standard Deviation is 0 while SCHD’s Sharpe Ratio is 0. Furthermore, the fund has a Mean Return of 0 and a Beta of 0.

The iShares Core Total USD Bond Market ETF (IUSB) has a Mean Return of 0 with a Beta of 0 and a Treynor Ratio of 0. Its Alpha is 0 while IUSB’s Sharpe Ratio is 0. Furthermore, the fund has a R-squared of 0 and a Standard Deviation of 0.

SCHD’s Mean Return is 0.00 points lower than that of IUSB and its R-squared is 0.00 points lower. With a Standard Deviation of 0, SCHD is slightly less volatile than IUSB. The Alpha and Beta of SCHD are 0.00 points lower and 0.00 points lower than IUSB’s Alpha and Beta.

Performance

Annual Returns

SCHD vs. IUSB - Annual Returns

Year SCHD IUSB
2020 15.11% 7.59%
2019 27.28% 9.26%
2018 -5.46% -0.38%
2017 20.88% 4.06%
2016 16.25% 3.78%
2015 -0.21% 0.46%
2014 11.66% 0.0%
2013 32.9% 0.0%
2012 11.4% 0.0%
2011 0.0% 0.0%
2010 0.0% 0.0%

SCHD had its best year in 2013 with an annual return of 32.9%. SCHD’s worst year over the past decade yielded -5.46% and occurred in 2018. In most years the Schwab U.S. Dividend Equity ETF provided moderate returns such as in 2012, 2014, and 2020 where annual returns amounted to 11.4%, 11.66%, and 15.11% respectively.

The year 2019 was the strongest year for IUSB, returning 9.26% on an annual basis. The poorest year for IUSB in the last ten years was 2018, with a yield of -0.38%. Most years the iShares Core Total USD Bond Market ETF has given investors modest returns, such as in 2011, 2010, and 2015, when gains were 0.0%, 0.0%, and 0.46% respectively.

Portfolio Growth

SCHD vs. IUSB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHD $10,000 $19,423 14.80%
IUSB $10,000 $12,704 4.13%

A $10,000 investment in SCHD would have resulted in a final balance of $19,423. This is a profit of $9,423 over 6 years and amounts to a compound annual growth rate (CAGR) of 14.80%.

With a $10,000 investment in IUSB, the end total would have been $12,704. This equates to a $2,704 profit over 6 years and a compound annual growth rate (CAGR) of 4.13%.

SCHD’s CAGR is 10.67 percentage points higher than that of IUSB and as a result, would have yielded $6,719 more on a $10,000 investment. Thus, SCHD outperformed IUSB by 10.67% annually.


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