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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.

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Summary

SCHFDGRO
NameSchwab International Equity ETFiShares Core Dividend Growth ETF
CategoryForeign Large BlendLarge Value
IssuerSchwab ETFsiShares
AUM26.99B20B
Avg. Return6.43%12.46%
Div. Yield2.16%2.04%
Expense Ratio0.06%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

SCHFDGRO
Technology11.55%18.98%
Industrials14.86%12.52%
Energy4.23%0.11%
Communication Services5.65%4.53%
Utilities3.09%7.34%
Healthcare11.05%17.55%
Consumer Defensive9.41%10.24%
Real Estate3.17%0.0%
Financial Services17.85%18.47%
Consumer Cyclical10.87%7.42%
Basic Materials8.26%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 HoldingsWeight
Nestle SA1.66%
Samsung Electronics Co Ltd1.6%
ASML Holding NV1.29%
Roche Holding AG1.24%
Toyota Motor Corp1.02%
LVMH Moet Hennessy Louis Vuitton SE0.93%
Novartis AG0.92%
Shopify Inc A0.78%
AstraZeneca PLC0.75%
SAP SE0.74%

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 HoldingsWeight
Microsoft Corp3.29%
Apple Inc3.26%
Pfizer Inc2.89%
Johnson & Johnson2.87%
Procter & Gamble Co2.79%
Verizon Communications Inc2.68%
JPMorgan Chase & Co2.57%
The Home Depot Inc2.35%
Merck & Co Inc2.11%
Cisco Systems Inc1.98%

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

SCHFDGRO
Mean Return0.580
R-squared98.160
Std. Deviation15.080
Alpha0.530
Beta0.990
Sharpe Ratio0.420
Treynor Ratio5.390

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

YearSCHFDGRO
20209.86%9.47%
201922.15%30.02%
2018-14.39%-2.24%
201725.83%22.84%
20162.88%15.27%
2015-2.44%-0.62%
2014-4.44%0.0%
201320.03%0.0%
201217.12%0.0%
2011-12.32%0.0%
20108.6%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

FundInitial BalanceFinal BalanceCAGR
SCHF$10,000$14,5096.43%
DGRO$10,000$19,58012.46%

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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