The Schwab International Equity ETF (SCHF) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. SCHF is a Schwab ETFs Foreign Large Blend fund and IUSB is a iShares N/A fund. So, what’s the difference between SCHF and IUSB? And which fund is better?
SCHF and IUSB have the same expense ratio: 0.06%. SCHF also has a high exposure to the financial services sector while IUSB is mostly comprised of AAA bonds. Overall, SCHF has provided higher returns than IUSB over the past 6 years.
In this article, we’ll compare SCHF vs. IUSB. We’ll look at risk metrics and annual returns, as well as at their performance and fund composition. Moreover, I’ll also discuss SCHF’s and IUSB’s portfolio growth, holdings, and industry exposure and examine how these affect their overall returns.
|Name||Schwab International Equity ETF||iShares Core Total USD Bond Market ETF|
|Category||Foreign Large Blend||N/A|
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 Total USD Bond Market ETF (IUSB) is a N/A fund that is issued by iShares. It currently has 14.49B total assets under management and has yielded an average annual return of 4.13% over the past 10 years. The fund has a dividend yield of 2.1% with an expense ratio of 0.06%.
SCHF’s dividend yield is 0.06% higher than that of IUSB (2.16% vs. 2.1%). Also, SCHF yielded on average 2.30% more per year over the past decade (6.43% vs. 4.13%). SCHF and IUSB have the same expense ratio: 0.06%.
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|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%|
|Shopify Inc A||0.78%|
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%.
|IUSB Bond Sectors||Weight|
IUSB’s Top Bond Sectors are ratings of AAA, BBB, A, BB, and AA at 58.32%, 16.98%, 12.27%, 4.33%, and 3.36%. The fund is less weighted towards B (2.8%), Others (1.01%), and Below B (0.92%) rated bonds.
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The Schwab International Equity ETF (SCHF) has a R-squared of 98.16 with a Treynor Ratio of 5.39 and a Mean Return of 0.58. Its Alpha is 0.53 while SCHF’s Sharpe Ratio is 0.42. Furthermore, the fund has a Beta of 0.99 and a Standard Deviation of 15.08.
The iShares Core Total USD Bond Market ETF (IUSB) has a Treynor Ratio of 0 with a Mean Return of 0 and a Beta of 0. Its Standard Deviation is 0 while IUSB’s Alpha is 0. Furthermore, the fund has a R-squared of 0 and a Sharpe Ratio of 0.
SCHF’s Mean Return is 0.58 points higher than that of IUSB and its R-squared is 98.16 points higher. With a Standard Deviation of 15.08, SCHF is slightly more volatile than IUSB. The Alpha and Beta of SCHF are 0.53 points higher and 0.99 points higher than IUSB’s Alpha and Beta.
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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 IUSB, returning 9.26% on an annual basis. The poorest year for IUSB in the last ten years was 2018, with a yield of -0.38%. Most years the iShares Core Total USD Bond Market ETF has given investors modest returns, such as in 2011, 2010, and 2015, when gains were 0.0%, 0.0%, and 0.46% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 IUSB, the end total would have been $12,704. This equates to a $2,704 profit over 6 years and a compound annual growth rate (CAGR) of 4.13%.
SCHF’s CAGR is 2.30 percentage points higher than that of IUSB and as a result, would have yielded $1,805 more on a $10,000 investment. Thus, SCHF outperformed IUSB by 2.30% annually.
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