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.
|Name||Schwab U.S. Dividend Equity ETF||iShares S&P 500 Value ETF|
|Category||Large Value||Large Value|
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%).
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%).
|Merck & Co Inc||4.24%|
|The Home Depot Inc||4.19%|
|Texas Instruments Inc||4.16%|
|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%.
|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%|
|Cisco Systems Inc||1.35%|
|Verizon Communications Inc||1.33%|
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%.
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.
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.
|Fund||Initial Balance||Final Balance||CAGR|
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.
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
3) If you are interested in crypto, check out Gemini. I've started allocating a small amount of assets to the growing crypto space and Gemini has just been a breeze to use. Once you register, make sure to also open an Active Trader account to buy crypto at the lowest fees on the market (just 0.03%!).
To see all of my most up-to-date recommendations, check out the Recommended Tools section.