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SCHF vs. SCHB: What’s The Difference?

The Schwab International Equity ETF (SCHF) and the Schwab U.S. Broad Market ETF (SCHB) are both among the Top 100 ETFs. SCHF is a Schwab ETFs Foreign Large Blend fund and SCHB is a Schwab ETFs Large Blend fund. So, what’s the difference between SCHF and SCHB? And which fund is better?

The expense ratio of SCHF is 0.03 percentage points higher than SCHB’s (0.06% vs. 0.03%). SCHF also has a higher exposure to the financial services sector and a higher standard deviation. Overall, SCHF has provided lower returns than SCHB over the past 10 years.

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

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Summary

SCHFSCHB
NameSchwab International Equity ETFSchwab U.S. Broad Market ETF
CategoryForeign Large BlendLarge Blend
IssuerSchwab ETFsSchwab ETFs
AUM26.99B21.44B
Avg. Return6.43%14.43%
Div. Yield2.16%1.39%
Expense Ratio0.06%0.03%

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 Schwab U.S. Broad Market ETF (SCHB) is a Large Blend fund that is issued by Schwab ETFs. It currently has 21.44B total assets under management and has yielded an average annual return of 14.43% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.03%.

SCHF’s dividend yield is 0.77% higher than that of SCHB (2.16% vs. 1.39%). Also, SCHF yielded on average 8.00% less per year over the past decade (6.43% vs. 14.43%). The expense ratio of SCHF is 0.03 percentage points higher than SCHB’s (0.06% vs. 0.03%).

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Fund Composition

Industry Exposure

SCHF vs. SCHB - Industry Exposure

SCHFSCHB
Technology11.55%24.15%
Industrials14.86%9.29%
Energy4.23%2.78%
Communication Services5.65%10.52%
Utilities3.09%2.32%
Healthcare11.05%13.37%
Consumer Defensive9.41%5.76%
Real Estate3.17%3.58%
Financial Services17.85%13.88%
Consumer Cyclical10.87%11.9%
Basic Materials8.26%2.45%

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 Schwab U.S. Broad Market ETF (SCHB) has the most exposure to the Technology sector at 24.15%. This is followed by Financial Services and Healthcare at 13.88% and 13.37% respectively. Basic Materials (2.45%), Energy (2.78%), and Real Estate (3.58%) only make up 8.81% of the fund’s total assets.

SCHB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.76%, 9.29%, 10.52%, 11.9%, and 13.37%.

SCHF is 3.97% more exposed to the Financial Services sector than SCHB (17.85% vs 13.88%). SCHF’s exposure to Industrials and Technology stocks is 5.57% higher and 12.60% lower respectively (14.86% vs. 9.29% and 11.55% vs. 24.15%). In total, Real Estate, Energy, and Communication Services also make up 3.83% less of the fund’s holdings compared to SCHB (13.05% vs. 16.88%).

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%.

SCHB - Holdings

SCHB HoldingsWeight
Apple Inc4.86%
Microsoft Corp4.61%
Amazon.com Inc3.33%
Facebook Inc A1.88%
Alphabet Inc A1.66%
Alphabet Inc Class C1.61%
Berkshire Hathaway Inc Class B1.19%
Tesla Inc1.18%
NVIDIA Corp1.13%
JPMorgan Chase & Co1.06%

SCHB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 4.86%, 4.61%, 3.33%, 1.88%, and 1.66%.

Alphabet Inc Class C (1.61%), Berkshire Hathaway Inc Class B (1.19%), and Tesla Inc (1.18%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHB’s holdings at 1.13% and 1.06%.

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Risk Analysis

SCHFSCHB
Mean Return0.581.23
R-squared98.1699.33
Std. Deviation15.0814.12
Alpha0.53-0.58
Beta0.991.04
Sharpe Ratio0.421
Treynor Ratio5.3913.58

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

The Schwab U.S. Broad Market ETF (SCHB) has a Alpha of -0.58 with a Sharpe Ratio of 1 and a Treynor Ratio of 13.58. Its Mean Return is 1.23 while SCHB’s Beta is 1.04. Furthermore, the fund has a Standard Deviation of 14.12 and a R-squared of 99.33.

SCHF’s Mean Return is 0.65 points lower than that of SCHB and its R-squared is 1.17 points lower. With a Standard Deviation of 15.08, SCHF is slightly more volatile than SCHB. The Alpha and Beta of SCHF are 1.11 points higher and 0.05 points lower than SCHB’s Alpha and Beta.

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Performance

Annual Returns

SCHF vs. SCHB - Annual Returns

YearSCHFSCHB
20209.86%20.77%
201922.15%30.94%
2018-14.39%-5.25%
201725.83%21.18%
20162.88%12.56%
2015-2.44%0.45%
2014-4.44%12.67%
201320.03%33.37%
201217.12%16.22%
2011-12.32%1.4%
20108.6%17.1%

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 2013 was the strongest year for SCHB, returning 33.37% on an annual basis. The poorest year for SCHB in the last ten years was 2018, with a yield of -5.25%. Most years the Schwab U.S. Broad Market ETF has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 12.67%, 16.22%, and 17.1% respectively.

Portfolio Growth

SCHF vs. SCHB - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
SCHF$10,000$17,0896.43%
SCHB$10,000$36,35414.43%

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 SCHB, the end total would have been $36,354. This equates to a $26,354 profit over 10 years and a compound annual growth rate (CAGR) of 14.43%.

SCHF’s CAGR is 8.00 percentage points lower than that of SCHB and as a result, would have yielded $19,265 less on a $10,000 investment. Thus, SCHF performed worse than SCHB by 8.00% annually.


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