SCHF vs. DGRO: What’s The Difference?

The Schwab International Equity ETF (SCHF) and the iShares Core Dividend Growth ETF (DGRO) are both among the Top 100 ETFs. SCHF is a Schwab ETFs Foreign Large Blend fund and DGRO is a iShares Large Value fund. So, what’s the difference between SCHF and DGRO? And which fund is better?

The expense ratio of SCHF is 0.02 percentage points lower than DGRO’s (0.06% vs. 0.08%). SCHF also has a lower exposure to the financial services sector and a higher standard deviation. Overall, SCHF has provided lower returns than DGRO over the past 6 years.

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

Summary

SCHF DGRO
Name Schwab International Equity ETF iShares Core Dividend Growth ETF
Category Foreign Large Blend Large Value
Issuer Schwab ETFs iShares
AUM 26.99B 20B
Avg. Return 6.43% 12.46%
Div. Yield 2.16% 2.04%
Expense Ratio 0.06% 0.08%

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 iShares Core Dividend Growth ETF (DGRO) is a Large Value fund that is issued by iShares. It currently has 20B total assets under management and has yielded an average annual return of 12.46% over the past 10 years. The fund has a dividend yield of 2.04% with an expense ratio of 0.08%.

SCHF’s dividend yield is 0.12% higher than that of DGRO (2.16% vs. 2.04%). Also, SCHF yielded on average 6.03% less per year over the past decade (6.43% vs. 12.46%). The expense ratio of SCHF is 0.02 percentage points lower than DGRO’s (0.06% vs. 0.08%).

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Fund Composition

Industry Exposure

SCHF vs. DGRO - Industry Exposure

SCHF DGRO
Technology 11.55% 18.98%
Industrials 14.86% 12.52%
Energy 4.23% 0.11%
Communication Services 5.65% 4.53%
Utilities 3.09% 7.34%
Healthcare 11.05% 17.55%
Consumer Defensive 9.41% 10.24%
Real Estate 3.17% 0.0%
Financial Services 17.85% 18.47%
Consumer Cyclical 10.87% 7.42%
Basic Materials 8.26% 2.83%

The Schwab International Equity ETF (SCHF) has the most exposure to the Financial Services sector at 17.85%. This is followed by Industrials and Technology at 14.86% and 11.55% respectively. Real Estate (3.17%), Energy (4.23%), and Communication Services (5.65%) only make up 13.05% of the fund’s total assets.

SCHF’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Consumer Cyclical, Healthcare, and Technology stocks at 8.26%, 9.41%, 10.87%, 11.05%, and 11.55%.

The iShares Core Dividend Growth ETF (DGRO) has the most exposure to the Technology sector at 18.98%. This is followed by Financial Services and Healthcare at 18.47% and 17.55% respectively. Energy (0.11%), Basic Materials (2.83%), and Communication Services (4.53%) only make up 7.47% of the fund’s total assets.

DGRO’s mid-section with moderate exposure is comprised of Utilities, Consumer Cyclical, Consumer Defensive, Industrials, and Healthcare stocks at 7.34%, 7.42%, 10.24%, 12.52%, and 17.55%.

SCHF is 0.62% less exposed to the Financial Services sector than DGRO (17.85% vs 18.47%). SCHF’s exposure to Industrials and Technology stocks is 2.34% higher and 7.43% lower respectively (14.86% vs. 12.52% and 11.55% vs. 18.98%). In total, Real Estate, Energy, and Communication Services also make up 8.41% more of the fund’s holdings compared to DGRO (13.05% vs. 4.64%).

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%.

DGRO - Holdings

DGRO Holdings Weight
Microsoft Corp 3.29%
Apple Inc 3.26%
Pfizer Inc 2.89%
Johnson & Johnson 2.87%
Procter & Gamble Co 2.79%
Verizon Communications Inc 2.68%
JPMorgan Chase & Co 2.57%
The Home Depot Inc 2.35%
Merck & Co Inc 2.11%
Cisco Systems Inc 1.98%

DGRO’s Top Holdings are Microsoft Corp, Apple Inc, Pfizer Inc, Johnson & Johnson, and Procter & Gamble Co at 3.29%, 3.26%, 2.89%, 2.87%, and 2.79%.

Verizon Communications Inc (2.68%), JPMorgan Chase & Co (2.57%), and The Home Depot Inc (2.35%) have a slightly smaller but still significant weight. Merck & Co Inc and Cisco Systems Inc are also represented in the DGRO’s holdings at 2.11% and 1.98%.

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Risk Analysis

SCHF DGRO
Mean Return 0.58 0
R-squared 98.16 0
Std. Deviation 15.08 0
Alpha 0.53 0
Beta 0.99 0
Sharpe Ratio 0.42 0
Treynor Ratio 5.39 0

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

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

SCHF’s Mean Return is 0.58 points higher than that of DGRO and its R-squared is 98.16 points higher. With a Standard Deviation of 15.08, SCHF is slightly more volatile than DGRO. The Alpha and Beta of SCHF are 0.53 points higher and 0.99 points higher than DGRO’s Alpha and Beta.

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Performance

Annual Returns

SCHF vs. DGRO - Annual Returns

Year SCHF DGRO
2020 9.86% 9.47%
2019 22.15% 30.02%
2018 -14.39% -2.24%
2017 25.83% 22.84%
2016 2.88% 15.27%
2015 -2.44% -0.62%
2014 -4.44% 0.0%
2013 20.03% 0.0%
2012 17.12% 0.0%
2011 -12.32% 0.0%
2010 8.6% 0.0%

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 2019 was the strongest year for DGRO, returning 30.02% on an annual basis. The poorest year for DGRO in the last ten years was 2018, with a yield of -2.24%. Most years the iShares Core Dividend Growth ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

SCHF vs. DGRO - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHF $10,000 $14,509 6.43%
DGRO $10,000 $19,580 12.46%

A $10,000 investment in SCHF would have resulted in a final balance of $14,509. This is a profit of $4,509 over 6 years and amounts to a compound annual growth rate (CAGR) of 6.43%.

With a $10,000 investment in DGRO, the end total would have been $19,580. This equates to a $9,580 profit over 6 years and a compound annual growth rate (CAGR) of 12.46%.

SCHF’s CAGR is 6.03 percentage points lower than that of DGRO and as a result, would have yielded $5,071 less on a $10,000 investment. Thus, SCHF performed worse than DGRO by 6.03% annually.


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