SCHD vs. IVE: What’s The Difference?

The Schwab U.S. Dividend Equity ETF (SCHD) and the iShares S&P 500 Value ETF (IVE) are both among the Top 100 ETFs. SCHD is a Schwab ETFs Large Value fund and IVE is a iShares Large Value fund. So, what’s the difference between SCHD and IVE? And which fund is better?

The expense ratio of SCHD is 0.12 percentage points lower than IVE’s (0.06% vs. 0.18%). SCHD also has a lower exposure to the financial services sector and a lower standard deviation. Overall, SCHD has provided higher returns than IVE over the past 8 years.

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

Summary

SCHD IVE
Name Schwab U.S. Dividend Equity ETF iShares S&P 500 Value ETF
Category Large Value Large Value
Issuer Schwab ETFs iShares
AUM 26B 22.4B
Avg. Return 14.80% 11.68%
Div. Yield 2.89% 1.88%
Expense Ratio 0.06% 0.18%

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 S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.

SCHD’s dividend yield is 1.01% higher than that of IVE (2.89% vs. 1.88%). Also, SCHD yielded on average 3.12% more per year over the past decade (14.80% vs. 11.68%). The expense ratio of SCHD is 0.12 percentage points lower than IVE’s (0.06% vs. 0.18%).

Fund Composition

Industry Exposure

SCHD vs. IVE - Industry Exposure

SCHD IVE
Technology 16.26% 9.41%
Industrials 18.05% 12.19%
Energy 1.87% 5.43%
Communication Services 4.96% 6.4%
Utilities 0.0% 4.82%
Healthcare 12.64% 15.4%
Consumer Defensive 14.04% 9.23%
Real Estate 0.0% 4.38%
Financial Services 21.69% 22.06%
Consumer Cyclical 8.36% 7.68%
Basic Materials 2.13% 2.99%

The Schwab U.S. Dividend Equity ETF (SCHD) has the most exposure to the Financial Services sector at 21.69%. This is followed by Industrials and Technology at 18.05% and 16.26% respectively. Utilities (0.0%), Energy (1.87%), and Basic Materials (2.13%) only make up 4.00% of the fund’s total assets.

SCHD’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Healthcare, Consumer Defensive, and Technology stocks at 4.96%, 8.36%, 12.64%, 14.04%, and 16.26%.

The iShares S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.

IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.

SCHD is 0.37% less exposed to the Financial Services sector than IVE (21.69% vs 22.06%). SCHD’s exposure to Industrials and Technology stocks is 5.86% higher and 6.85% higher respectively (18.05% vs. 12.19% and 16.26% vs. 9.41%). In total, Utilities, Energy, and Basic Materials also make up 9.24% less of the fund’s holdings compared to IVE (4.00% vs. 13.24%).

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%.

IVE - Holdings

IVE Holdings Weight
Berkshire Hathaway Inc Class B 3.05%
JPMorgan Chase & Co 2.65%
The Walt Disney Co 1.85%
Bank of America Corp 1.67%
Johnson & Johnson 1.57%
Exxon Mobil Corp 1.41%
Pfizer Inc 1.38%
Cisco Systems Inc 1.35%
Verizon Communications Inc 1.33%
Intel Corp 1.25%

IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.

Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.

Risk Analysis

SCHD IVE
Mean Return 0 1.05
R-squared 0 92.08
Std. Deviation 0 14.3
Alpha 0 -2.9
Beta 0 1.01
Sharpe Ratio 0 0.83
Treynor Ratio 0 11.41

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

The iShares S&P 500 Value ETF (IVE) has a Beta of 1.01 with a Mean Return of 1.05 and a Alpha of -2.9. Its R-squared is 92.08 while IVE’s Treynor Ratio is 11.41. Furthermore, the fund has a Sharpe Ratio of 0.83 and a Standard Deviation of 14.3.

SCHD’s Mean Return is 1.05 points lower than that of IVE and its R-squared is 92.08 points lower. With a Standard Deviation of 0, SCHD is slightly less volatile than IVE. The Alpha and Beta of SCHD are 2.90 points higher and 1.01 points lower than IVE’s Alpha and Beta.

Performance

Annual Returns

SCHD vs. IVE - Annual Returns

Year SCHD IVE
2020 15.11% 1.24%
2019 27.28% 31.71%
2018 -5.46% -9.09%
2017 20.88% 15.19%
2016 16.25% 17.17%
2015 -0.21% -3.24%
2014 11.66% 12.14%
2013 32.9% 31.69%
2012 11.4% 17.45%
2011 0.0% -0.63%
2010 0.0% 14.9%

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 IVE, returning 31.71% on an annual basis. The poorest year for IVE in the last ten years was 2018, with a yield of -9.09%. Most years the iShares S&P 500 Value ETF has given investors modest returns, such as in 2014, 2010, and 2017, when gains were 12.14%, 14.9%, and 15.19% respectively.

Portfolio Growth

SCHD vs. IVE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHD $10,000 $28,823 14.80%
IVE $10,000 $23,378 11.68%

A $10,000 investment in SCHD would have resulted in a final balance of $28,823. This is a profit of $18,823 over 8 years and amounts to a compound annual growth rate (CAGR) of 14.80%.

With a $10,000 investment in IVE, the end total would have been $23,378. This equates to a $13,378 profit over 8 years and a compound annual growth rate (CAGR) of 11.68%.

SCHD’s CAGR is 3.12 percentage points higher than that of IVE and as a result, would have yielded $5,445 more on a $10,000 investment. Thus, SCHD outperformed IVE by 3.12% annually.


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