The Schwab International Equity ETF (SCHF) and the iShares Gold Trust (IAU) are both among the Top 100 ETFs. SCHF is a Schwab ETFs Foreign Large Blend fund and IAU is a iShares N/A fund. So, what’s the difference between SCHF and IAU? And which fund is better?
The expense ratio of SCHF is 0.19 percentage points lower than IAU’s (0.06% vs. 0.25%). SCHF also has a higher exposure to the financial services sector and a lower standard deviation. Overall, SCHF has provided higher returns than IAU over the past 10 years.
In this article, we’ll compare SCHF vs. IAU. We’ll look at industry exposure and annual returns, as well as at their portfolio growth and risk metrics. Moreover, I’ll also discuss SCHF’s and IAU’s holdings, fund composition, and performance and examine how these affect their overall returns.
Summary
| SCHF | IAU | |
| Name | Schwab International Equity ETF | iShares Gold Trust |
| Category | Foreign Large Blend | N/A |
| Issuer | Schwab ETFs | iShares |
| AUM | 26.99B | 28.61B |
| Avg. Return | 6.43% | 6.03% |
| Div. Yield | 2.16% | 0.0% |
| Expense Ratio | 0.06% | 0.25% |
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 Gold Trust (IAU) is a N/A fund that is issued by iShares. It currently has 28.61B total assets under management and has yielded an average annual return of 6.03% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.25%.
SCHF’s dividend yield is 2.16% higher than that of IAU (2.16% vs. 0.0%). Also, SCHF yielded on average 0.40% more per year over the past decade (6.43% vs. 6.03%). The expense ratio of SCHF is 0.19 percentage points lower than IAU’s (0.06% vs. 0.25%).
Fund Composition
Industry Exposure
| SCHF | IAU | |
| Technology | 11.55% | 0.0% |
| Industrials | 14.86% | 0.0% |
| Energy | 4.23% | 0.0% |
| Communication Services | 5.65% | 0.0% |
| Utilities | 3.09% | 0.0% |
| Healthcare | 11.05% | 0.0% |
| Consumer Defensive | 9.41% | 0.0% |
| Real Estate | 3.17% | 0.0% |
| Financial Services | 17.85% | 0.0% |
| Consumer Cyclical | 10.87% | 0.0% |
| Basic Materials | 8.26% | 0.0% |
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 Gold Trust (IAU) has the most exposure to the Technology sector at 0.0%. This is followed by Industrials and Energy at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.
IAU’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Energy stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
SCHF is 17.85% more exposed to the Financial Services sector than IAU (17.85% vs 0.0%). SCHF’s exposure to Industrials and Technology stocks is 14.86% higher and 11.55% higher respectively (14.86% vs. 0.0% and 11.55% vs. 0.0%). In total, Real Estate, Energy, and Communication Services also make up 13.05% more of the fund’s holdings compared to IAU (13.05% vs. 0.00%).
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%.
| IAU Holdings | Weight |
| Gold | 100.0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
IAU’s Top Holdings are Gold, N/A, N/A, N/A, and N/A at 100.0%, 0%, 0%, 0%, and 0%.
N/A (0%), N/A (0%), and N/A (0%) have a slightly smaller but still significant weight. N/A and N/A are also represented in the IAU’s holdings at 0% and 0%.
Risk Analysis
| SCHF | IAU | |
| Mean Return | 0.58 | 0.23 |
| R-squared | 98.16 | 16.03 |
| Std. Deviation | 15.08 | 16.97 |
| Alpha | 0.53 | 4.16 |
| Beta | 0.99 | 0.48 |
| Sharpe Ratio | 0.42 | 0.13 |
| Treynor Ratio | 5.39 | 1.5 |
The Schwab International Equity ETF (SCHF) has a Sharpe Ratio of 0.42 with a R-squared of 98.16 and a Alpha of 0.53. Its Beta is 0.99 while SCHF’s Treynor Ratio is 5.39. Furthermore, the fund has a Mean Return of 0.58 and a Standard Deviation of 15.08.
The iShares Gold Trust (IAU) has a Mean Return of 0.23 with a R-squared of 16.03 and a Beta of 0.48. Its Sharpe Ratio is 0.13 while IAU’s Treynor Ratio is 1.5. Furthermore, the fund has a Standard Deviation of 16.97 and a Alpha of 4.16.
SCHF’s Mean Return is 0.35 points higher than that of IAU and its R-squared is 82.13 points higher. With a Standard Deviation of 15.08, SCHF is slightly less volatile than IAU. The Alpha and Beta of SCHF are 3.63 points lower and 0.51 points higher than IAU’s Alpha and Beta.
Performance
Annual Returns
| Year | SCHF | IAU |
| 2020 | 9.86% | 23.86% |
| 2019 | 22.15% | 18.54% |
| 2018 | -14.39% | -1.39% |
| 2017 | 25.83% | 11.58% |
| 2016 | 2.88% | 8.85% |
| 2015 | -2.44% | -11.65% |
| 2014 | -4.44% | -0.44% |
| 2013 | 20.03% | -27.96% |
| 2012 | 17.12% | 8.37% |
| 2011 | -12.32% | 8.66% |
| 2010 | 8.6% | 27.93% |
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 2010 was the strongest year for IAU, returning 27.93% on an annual basis. The poorest year for IAU in the last ten years was 2013, with a yield of -27.96%. Most years the iShares Gold Trust has given investors modest returns, such as in 2012, 2011, and 2016, when gains were 8.37%, 8.66%, and 8.85% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| SCHF | $10,000 | $17,089 | 6.43% |
| IAU | $10,000 | $13,121 | 6.03% |
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 IAU, the end total would have been $13,121. This equates to a $3,121 profit over 10 years and a compound annual growth rate (CAGR) of 6.03%.
SCHF’s CAGR is 0.40 percentage points higher than that of IAU and as a result, would have yielded $3,968 more on a $10,000 investment. Thus, SCHF outperformed IAU by 0.40% annually.
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