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

The expense ratio of SCHF is 0.09 percentage points lower than MTUM’s (0.06% vs. 0.15%). SCHF also has a lower exposure to the financial services sector and a higher standard deviation. Overall, SCHF has provided lower returns than MTUM over the past 7 years.

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

Summary

SCHFMTUM
NameSchwab International Equity ETFiShares MSCI USA Momentum Factor ETF
CategoryForeign Large BlendLarge Growth
IssuerSchwab ETFsiShares
AUM26.99B14.53B
Avg. Return6.43%17.37%
Div. Yield2.16%0.44%
Expense Ratio0.06%0.15%

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 MSCI USA Momentum Factor ETF (MTUM) is a Large Growth fund that is issued by iShares. It currently has 14.53B total assets under management and has yielded an average annual return of 17.37% over the past 10 years. The fund has a dividend yield of 0.44% with an expense ratio of 0.15%.

SCHF’s dividend yield is 1.72% higher than that of MTUM (2.16% vs. 0.44%). Also, SCHF yielded on average 10.94% less per year over the past decade (6.43% vs. 17.37%). The expense ratio of SCHF is 0.09 percentage points lower than MTUM’s (0.06% vs. 0.15%).

Fund Composition

Industry Exposure

SCHF vs. MTUM - Industry Exposure

SCHFMTUM
Technology11.55%15.24%
Industrials14.86%12.47%
Energy4.23%1.77%
Communication Services5.65%13.18%
Utilities3.09%0.19%
Healthcare11.05%6.41%
Consumer Defensive9.41%2.88%
Real Estate3.17%0.43%
Financial Services17.85%34.32%
Consumer Cyclical10.87%9.96%
Basic Materials8.26%3.15%

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 MSCI USA Momentum Factor ETF (MTUM) has the most exposure to the Financial Services sector at 34.32%. This is followed by Technology and Communication Services at 15.24% and 13.18% respectively. Real Estate (0.43%), Energy (1.77%), and Consumer Defensive (2.88%) only make up 5.08% of the fund’s total assets.

MTUM’s mid-section with moderate exposure is comprised of Basic Materials, Healthcare, Consumer Cyclical, Industrials, and Communication Services stocks at 3.15%, 6.41%, 9.96%, 12.47%, and 13.18%.

SCHF is 16.47% less exposed to the Financial Services sector than MTUM (17.85% vs 34.32%). SCHF’s exposure to Industrials and Technology stocks is 2.39% higher and 3.69% lower respectively (14.86% vs. 12.47% and 11.55% vs. 15.24%). In total, Real Estate, Energy, and Communication Services also make up 2.33% less of the fund’s holdings compared to MTUM (13.05% vs. 15.38%).

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%.

MTUM - Holdings

MTUM HoldingsWeight
Tesla Inc5.63%
The Walt Disney Co4.39%
JPMorgan Chase & Co4.35%
Berkshire Hathaway Inc Class B4.34%
Bank of America Corp3.81%
PayPal Holdings Inc3.76%
Wells Fargo & Co3.05%
Applied Materials Inc3.05%
Moderna Inc2.89%
Alphabet Inc Class C2.84%

MTUM’s Top Holdings are Tesla Inc, The Walt Disney Co, JPMorgan Chase & Co, Berkshire Hathaway Inc Class B, and Bank of America Corp at 5.63%, 4.39%, 4.35%, 4.34%, and 3.81%.

PayPal Holdings Inc (3.76%), Wells Fargo & Co (3.05%), and Applied Materials Inc (3.05%) have a slightly smaller but still significant weight. Moderna Inc and Alphabet Inc Class C are also represented in the MTUM’s holdings at 2.89% and 2.84%.

Risk Analysis

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

The iShares MSCI USA Momentum Factor ETF (MTUM) has a Standard Deviation of 0 with a Treynor Ratio of 0 and a Beta of 0. Its Mean Return is 0 while MTUM’s Sharpe Ratio is 0. Furthermore, the fund has a Alpha of 0 and a R-squared of 0.

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

Performance

Annual Returns

SCHF vs. MTUM - Annual Returns

YearSCHFMTUM
20209.86%29.69%
201922.15%27.57%
2018-14.39%-1.77%
201725.83%37.6%
20162.88%4.89%
2015-2.44%9.12%
2014-4.44%14.48%
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 2017 was the strongest year for MTUM, returning 37.6% on an annual basis. The poorest year for MTUM in the last ten years was 2018, with a yield of -1.77%. Most years the iShares MSCI USA Momentum Factor ETF has given investors modest returns, such as in 2010, 2016, and 2015, when gains were 0.0%, 4.89%, and 9.12% respectively.

Portfolio Growth

SCHF vs. MTUM - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
SCHF$10,000$13,8656.43%
MTUM$10,000$29,30117.37%

A $10,000 investment in SCHF would have resulted in a final balance of $13,865. This is a profit of $3,865 over 7 years and amounts to a compound annual growth rate (CAGR) of 6.43%.

With a $10,000 investment in MTUM, the end total would have been $29,301. This equates to a $19,301 profit over 7 years and a compound annual growth rate (CAGR) of 17.37%.

SCHF’s CAGR is 10.94 percentage points lower than that of MTUM and as a result, would have yielded $15,436 less on a $10,000 investment. Thus, SCHF performed worse than MTUM by 10.94% annually.

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