SCHF vs. SCHG: What’s The Difference?

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

The expense ratio of SCHF is 0.02 percentage points higher than SCHG’s (0.06% vs. 0.04%). SCHF also has a higher exposure to the financial services sector and a higher standard deviation. Overall, SCHF has provided lower returns than SCHG over the past 10 years.

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

Summary

SCHF SCHG
Name Schwab International Equity ETF Schwab U.S. Large-Cap Growth ETF
Category Foreign Large Blend Large Growth
Issuer Schwab ETFs Schwab ETFs
AUM 26.99B 15.16B
Avg. Return 6.43% 17.81%
Div. Yield 2.16% 0.43%
Expense Ratio 0.06% 0.04%

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. Large-Cap Growth ETF (SCHG) is a Large Growth fund that is issued by Schwab ETFs. It currently has 15.16B total assets under management and has yielded an average annual return of 17.81% over the past 10 years. The fund has a dividend yield of 0.43% with an expense ratio of 0.04%.

SCHF’s dividend yield is 1.73% higher than that of SCHG (2.16% vs. 0.43%). Also, SCHF yielded on average 11.38% less per year over the past decade (6.43% vs. 17.81%). The expense ratio of SCHF is 0.02 percentage points higher than SCHG’s (0.06% vs. 0.04%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

SCHF vs. SCHG - Industry Exposure

SCHF SCHG
Technology 11.55% 39.21%
Industrials 14.86% 3.01%
Energy 4.23% 0.2%
Communication Services 5.65% 17.07%
Utilities 3.09% 0.0%
Healthcare 11.05% 12.05%
Consumer Defensive 9.41% 2.15%
Real Estate 3.17% 1.64%
Financial Services 17.85% 7.98%
Consumer Cyclical 10.87% 15.01%
Basic Materials 8.26% 1.68%

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. Large-Cap Growth ETF (SCHG) has the most exposure to the Technology sector at 39.21%. This is followed by Communication Services and Consumer Cyclical at 17.07% and 15.01% respectively. Energy (0.2%), Real Estate (1.64%), and Basic Materials (1.68%) only make up 3.52% of the fund’s total assets.

SCHG’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 2.15%, 3.01%, 7.98%, 12.05%, and 15.01%.

SCHF is 9.87% more exposed to the Financial Services sector than SCHG (17.85% vs 7.98%). SCHF’s exposure to Industrials and Technology stocks is 11.85% higher and 27.66% lower respectively (14.86% vs. 3.01% and 11.55% vs. 39.21%). In total, Real Estate, Energy, and Communication Services also make up 5.86% less of the fund’s holdings compared to SCHG (13.05% vs. 18.91%).

Holdings

SCHF - 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%.

SCHG - Holdings

SCHG Holdings Weight
Apple Inc 11.49%
Microsoft Corp 10.91%
Amazon.com Inc 7.89%
Facebook Inc A 4.45%
Alphabet Inc A 3.93%
Alphabet Inc Class C 3.82%
Tesla Inc 2.8%
NVIDIA Corp 2.67%
Visa Inc Class A 2.12%
UnitedHealth Group Inc 2.02%

SCHG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 11.49%, 10.91%, 7.89%, 4.45%, and 3.93%.

Alphabet Inc Class C (3.82%), Tesla Inc (2.8%), and NVIDIA Corp (2.67%) have a slightly smaller but still significant weight. Visa Inc Class A and UnitedHealth Group Inc are also represented in the SCHG’s holdings at 2.12% and 2.02%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

SCHF SCHG
Mean Return 0.58 1.46
R-squared 98.16 92.92
Std. Deviation 15.08 14.78
Alpha 0.53 1.97
Beta 0.99 1.05
Sharpe Ratio 0.42 1.14
Treynor Ratio 5.39 16.3

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

The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Standard Deviation of 14.78 with a R-squared of 92.92 and a Treynor Ratio of 16.3. Its Alpha is 1.97 while SCHG’s Mean Return is 1.46. Furthermore, the fund has a Beta of 1.05 and a Sharpe Ratio of 1.14.

SCHF’s Mean Return is 0.88 points lower than that of SCHG and its R-squared is 5.24 points higher. With a Standard Deviation of 15.08, SCHF is slightly more volatile than SCHG. The Alpha and Beta of SCHF are 1.44 points lower and 0.06 points lower than SCHG’s Alpha and Beta.

BTW: Uncorrelated crypto assets such as Bitcoin can serve as a hedge and mitigate risk. I've allocated around 5% of my portfolio to crypto assets through Coinbase - the simplest and cheapest broker I've found! Click here to read more (link to Coinbase).

Performance

Annual Returns

SCHF vs. SCHG - Annual Returns

Year SCHF SCHG
2020 9.86% 39.13%
2019 22.15% 36.21%
2018 -14.39% -1.35%
2017 25.83% 28.04%
2016 2.88% 6.76%
2015 -2.44% 3.26%
2014 -4.44% 15.74%
2013 20.03% 33.96%
2012 17.12% 17.02%
2011 -12.32% -0.67%
2010 8.6% 16.83%

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 2020 was the strongest year for SCHG, returning 39.13% on an annual basis. The poorest year for SCHG in the last ten years was 2018, with a yield of -1.35%. Most years the Schwab U.S. Large-Cap Growth ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 15.74%, 16.83%, and 17.02% respectively.

Portfolio Growth

SCHF vs. SCHG - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHF $10,000 $17,089 6.43%
SCHG $10,000 $47,556 17.81%

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 SCHG, the end total would have been $47,556. This equates to a $37,556 profit over 10 years and a compound annual growth rate (CAGR) of 17.81%.

SCHF’s CAGR is 11.38 percentage points lower than that of SCHG and as a result, would have yielded $30,467 less on a $10,000 investment. Thus, SCHF performed worse than SCHG by 11.38% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

3) If you are interested in crypto, check out Coinbase. I've started allocating a small amount of assets to the growing crypto space and Coinbase has just been a breeze to use. Once you register, make sure to also open an Coinbase Pro account to buy crypto at the lowest fees on the market (just 0.1%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply