SCHF vs. BIV: What’s The Difference?

The Schwab International Equity ETF (SCHF) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. SCHF is a Schwab ETFs Foreign Large Blend fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between SCHF and BIV? And which fund is better?

The expense ratio of SCHF is 0.01 percentage points higher than BIV’s (0.06% vs. 0.05%). SCHF also has a high exposure to the financial services sector while BIV is mostly comprised of AAA bonds. Overall, SCHF has provided higher returns than BIV over the past 10 years.

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

Summary

SCHF BIV
Name Schwab International Equity ETF Vanguard Intermediate-Term Bond Index Fund ETF Shares
Category Foreign Large Blend Intermediate-Term Bond
Issuer Schwab ETFs Vanguard
AUM 26.99B 39.05B
Avg. Return 6.43% 5.31%
Div. Yield 2.16% 2.06%
Expense Ratio 0.06% 0.05%

The Schwab International Equity ETF (SCHF) is a Foreign Large Blend fund that is issued by Schwab ETFs. It currently has 26.99B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 2.16% with an expense ratio of 0.06%.

The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 39.05B total assets under management and has yielded an average annual return of 5.31% over the past 10 years. The fund has a dividend yield of 2.06% with an expense ratio of 0.05%.

SCHF’s dividend yield is 0.10% higher than that of BIV (2.16% vs. 2.06%). Also, SCHF yielded on average 1.11% more per year over the past decade (6.43% vs. 5.31%). The expense ratio of SCHF is 0.01 percentage points higher than BIV’s (0.06% vs. 0.05%).

Fund Composition

Holdings

SCHF - Holdings

SCHF Holdings Weight
Nestle SA 1.66%
Samsung Electronics Co Ltd 1.6%
ASML Holding NV 1.29%
Roche Holding AG 1.24%
Toyota Motor Corp 1.02%
LVMH Moet Hennessy Louis Vuitton SE 0.93%
Novartis AG 0.92%
Shopify Inc A 0.78%
AstraZeneca PLC 0.75%
SAP SE 0.74%

SCHF’s Top Holdings are Nestle SA, Samsung Electronics Co Ltd, ASML Holding NV, Roche Holding AG, and Toyota Motor Corp at 1.66%, 1.6%, 1.29%, 1.24%, and 1.02%.

LVMH Moet Hennessy Louis Vuitton SE (0.93%), Novartis AG (0.92%), and Shopify Inc A (0.78%) have a slightly smaller but still significant weight. AstraZeneca PLC and SAP SE are also represented in the SCHF’s holdings at 0.75% and 0.74%.

BIV - Holdings

BIV Bond Sectors Weight
AAA 54.51%
BBB 25.24%
A 16.97%
AA 3.1%
Others 0.15%
Below B 0.03%
B 0.0%
BB 0.0%
US Government 0.0%

BIV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 54.51%, 25.24%, 16.97%, 3.1%, and 0.15%. The fund is less weighted towards Below B (0.03%), B (0.0%), and BB (0.0%) rated bonds.

Risk Analysis

SCHF BIV
Mean Return 0.58 0.35
R-squared 98.16 95.12
Std. Deviation 15.08 4.09
Alpha 0.53 -0.07
Beta 0.99 1.33
Sharpe Ratio 0.42 0.89
Treynor Ratio 5.39 2.72

The Schwab International Equity ETF (SCHF) has a R-squared of 98.16 with a Alpha of 0.53 and a Standard Deviation of 15.08. Its Sharpe Ratio is 0.42 while SCHF’s Mean Return is 0.58. Furthermore, the fund has a Beta of 0.99 and a Treynor Ratio of 5.39.

The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) has a Alpha of -0.07 with a Standard Deviation of 4.09 and a Beta of 1.33. Its Mean Return is 0.35 while BIV’s Treynor Ratio is 2.72. Furthermore, the fund has a R-squared of 95.12 and a Sharpe Ratio of 0.89.

SCHF’s Mean Return is 0.23 points higher than that of BIV and its R-squared is 3.04 points higher. With a Standard Deviation of 15.08, SCHF is slightly more volatile than BIV. The Alpha and Beta of SCHF are 0.60 points higher and 0.34 points lower than BIV’s Alpha and Beta.

Performance

Annual Returns

SCHF vs. BIV - Annual Returns

Year SCHF BIV
2020 9.86% 9.71%
2019 22.15% 10.19%
2018 -14.39% -0.09%
2017 25.83% 3.8%
2016 2.88% 2.86%
2015 -2.44% 1.23%
2014 -4.44% 7.0%
2013 20.03% -3.44%
2012 17.12% 7.02%
2011 -12.32% 10.62%
2010 8.6% 9.55%

SCHF had its best year in 2017 with an annual return of 25.83%. SCHF’s worst year over the past decade yielded -14.39% and occurred in 2018. In most years the Schwab International Equity ETF provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to 2.88%, 8.6%, and 9.86% respectively.

The year 2011 was the strongest year for BIV, returning 10.62% on an annual basis. The poorest year for BIV in the last ten years was 2013, with a yield of -3.44%. Most years the Vanguard Intermediate-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 3.8%, 7.0%, and 7.02% respectively.

Portfolio Growth

SCHF vs. BIV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHF $10,000 $17,089 6.43%
BIV $10,000 $15,967 5.31%

A $10,000 investment in SCHF would have resulted in a final balance of $17,089. This is a profit of $7,089 over 10 years and amounts to a compound annual growth rate (CAGR) of 6.43%.

With a $10,000 investment in BIV, the end total would have been $15,967. This equates to a $5,967 profit over 10 years and a compound annual growth rate (CAGR) of 5.31%.

SCHF’s CAGR is 1.11 percentage points higher than that of BIV and as a result, would have yielded $1,122 more on a $10,000 investment. Thus, SCHF outperformed BIV by 1.11% annually.


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