The Schwab U.S. Dividend Equity ETF (SCHD) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. SCHD is a Schwab ETFs Large Value fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between SCHD and IWP? And which fund is better?
The expense ratio of SCHD is 0.18 percentage points lower than IWP’s (0.06% vs. 0.24%). SCHD also has a higher exposure to the financial services sector and a lower standard deviation. Overall, SCHD has provided lower returns than IWP over the past 8 years.
In this article, we’ll compare SCHD vs. IWP. We’ll look at performance and portfolio growth, as well as at their holdings and risk metrics. Moreover, I’ll also discuss SCHD’s and IWP’s annual returns, fund composition, and industry exposure and examine how these affect their overall returns.
Summary
| SCHD | IWP | |
| Name | Schwab U.S. Dividend Equity ETF | iShares Russell Mid-Cap Growth ETF |
| Category | Large Value | Mid-Cap Growth |
| Issuer | Schwab ETFs | iShares |
| AUM | 26B | 15.7B |
| Avg. Return | 14.80% | 16.75% |
| Div. Yield | 2.89% | 0.26% |
| Expense Ratio | 0.06% | 0.24% |
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 Russell Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.
SCHD’s dividend yield is 2.63% higher than that of IWP (2.89% vs. 0.26%). Also, SCHD yielded on average 1.95% less per year over the past decade (14.80% vs. 16.75%). The expense ratio of SCHD is 0.18 percentage points lower than IWP’s (0.06% vs. 0.24%).
Fund Composition
Industry Exposure
| SCHD | IWP | |
| Technology | 16.26% | 33.88% |
| Industrials | 18.05% | 14.09% |
| Energy | 1.87% | 1.51% |
| Communication Services | 4.96% | 6.32% |
| Utilities | 0.0% | 0.16% |
| Healthcare | 12.64% | 16.79% |
| Consumer Defensive | 14.04% | 2.32% |
| Real Estate | 0.0% | 2.46% |
| Financial Services | 21.69% | 4.52% |
| Consumer Cyclical | 8.36% | 16.09% |
| Basic Materials | 2.13% | 1.86% |
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 Russell Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.
IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.
SCHD is 17.17% more exposed to the Financial Services sector than IWP (21.69% vs 4.52%). SCHD’s exposure to Industrials and Technology stocks is 3.96% higher and 17.62% lower respectively (18.05% vs. 14.09% and 16.26% vs. 33.88%). In total, Utilities, Energy, and Basic Materials also make up 0.47% more of the fund’s holdings compared to IWP (4.00% vs. 3.53%).
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%.
| IWP Holdings | Weight |
| IDEXX Laboratories Inc | 1.3% |
| DocuSign Inc | 1.3% |
| Roku Inc Class A | 1.29% |
| Match Group Inc | 1.06% |
| Chipotle Mexican Grill Inc | 1.06% |
| Pinterest Inc | 1.05% |
| Veeva Systems Inc Class A | 1.04% |
| Palantir Technologies Inc Ordinary Shares – Class A | 1.04% |
| Lululemon Athletica Inc | 1.01% |
| DexCom Inc | 1.0% |
IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.
Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.
Risk Analysis
| SCHD | IWP | |
| Mean Return | 0 | 1.27 |
| R-squared | 0 | 87.01 |
| Std. Deviation | 0 | 16.05 |
| Alpha | 0 | -1.03 |
| Beta | 0 | 1.1 |
| Sharpe Ratio | 0 | 0.91 |
| Treynor Ratio | 0 | 12.98 |
The Schwab U.S. Dividend Equity ETF (SCHD) has a Standard Deviation of 0 with a Sharpe Ratio of 0 and a Mean Return of 0. Its Alpha is 0 while SCHD’s Treynor Ratio is 0. Furthermore, the fund has a R-squared of 0 and a Beta of 0.
The iShares Russell Mid-Cap Growth ETF (IWP) has a Mean Return of 1.27 with a Beta of 1.1 and a R-squared of 87.01. Its Sharpe Ratio is 0.91 while IWP’s Treynor Ratio is 12.98. Furthermore, the fund has a Alpha of -1.03 and a Standard Deviation of 16.05.
SCHD’s Mean Return is 1.27 points lower than that of IWP and its R-squared is 87.01 points lower. With a Standard Deviation of 0, SCHD is slightly less volatile than IWP. The Alpha and Beta of SCHD are 1.03 points higher and 1.10 points lower than IWP’s Alpha and Beta.
Performance
Annual Returns
| Year | SCHD | IWP |
| 2020 | 15.11% | 35.29% |
| 2019 | 27.28% | 35.14% |
| 2018 | -5.46% | -4.95% |
| 2017 | 20.88% | 24.98% |
| 2016 | 16.25% | 7.15% |
| 2015 | -0.21% | -0.39% |
| 2014 | 11.66% | 11.68% |
| 2013 | 32.9% | 35.44% |
| 2012 | 11.4% | 15.62% |
| 2011 | 0.0% | -1.82% |
| 2010 | 0.0% | 26.1% |
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 2013 was the strongest year for IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| SCHD | $10,000 | $28,823 | 14.80% |
| IWP | $10,000 | $35,063 | 16.75% |
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 IWP, the end total would have been $35,063. This equates to a $25,063 profit over 8 years and a compound annual growth rate (CAGR) of 16.75%.
SCHD’s CAGR is 1.95 percentage points lower than that of IWP and as a result, would have yielded $6,240 less on a $10,000 investment. Thus, SCHD performed worse than IWP by 1.95% annually.
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