SCHF vs. VLUE: What’s The Difference?

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

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

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

Summary

SCHF VLUE
Name Schwab International Equity ETF iShares MSCI USA Value Factor ETF
Category Foreign Large Blend Large Value
Issuer Schwab ETFs iShares
AUM 26.99B 15.95B
Avg. Return 6.43% 8.91%
Div. Yield 2.16% 1.89%
Expense Ratio 0.06% 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 Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.

SCHF’s dividend yield is 0.27% higher than that of VLUE (2.16% vs. 1.89%). Also, SCHF yielded on average 2.48% less per year over the past decade (6.43% vs. 8.91%). The expense ratio of SCHF is 0.09 percentage points lower than VLUE’s (0.06% vs. 0.15%).

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Fund Composition

Industry Exposure

SCHF vs. VLUE - Industry Exposure

SCHF VLUE
Technology 11.55% 26.89%
Industrials 14.86% 9.14%
Energy 4.23% 2.42%
Communication Services 5.65% 10.39%
Utilities 3.09% 2.68%
Healthcare 11.05% 14.31%
Consumer Defensive 9.41% 7.22%
Real Estate 3.17% 3.19%
Financial Services 17.85% 10.96%
Consumer Cyclical 10.87% 10.66%
Basic Materials 8.26% 2.14%

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 Value Factor ETF (VLUE) has the most exposure to the Technology sector at 26.89%. This is followed by Healthcare and Financial Services at 14.31% and 10.96% respectively. Energy (2.42%), Utilities (2.68%), and Real Estate (3.19%) only make up 8.29% of the fund’s total assets.

VLUE’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Financial Services stocks at 7.22%, 9.14%, 10.39%, 10.66%, and 10.96%.

SCHF is 6.89% more exposed to the Financial Services sector than VLUE (17.85% vs 10.96%). SCHF’s exposure to Industrials and Technology stocks is 5.72% higher and 15.34% lower respectively (14.86% vs. 9.14% and 11.55% vs. 26.89%). In total, Real Estate, Energy, and Communication Services also make up 2.95% less of the fund’s holdings compared to VLUE (13.05% vs. 16.00%).

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%.

VLUE - Holdings

VLUE Holdings Weight
AT&T Inc 7.13%
Intel Corp 6.14%
General Motors Co 3.19%
Micron Technology Inc 3.14%
Cisco Systems Inc 3.05%
International Business Machines Corp 2.76%
Target Corp 2.38%
Citigroup Inc 2.32%
Ford Motor Co 2.23%
Pfizer Inc 2.17%

VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.

International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.

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Risk Analysis

SCHF VLUE
Mean Return 0.58 0
R-squared 98.16 0
Std. Deviation 15.08 0
Alpha 0.53 0
Beta 0.99 0
Sharpe Ratio 0.42 0
Treynor Ratio 5.39 0

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

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

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

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Performance

Annual Returns

SCHF vs. VLUE - Annual Returns

Year SCHF VLUE
2020 9.86% -0.32%
2019 22.15% 27.47%
2018 -14.39% -11.18%
2017 25.83% 21.97%
2016 2.88% 15.68%
2015 -2.44% -3.54%
2014 -4.44% 12.29%
2013 20.03% 0.0%
2012 17.12% 0.0%
2011 -12.32% 0.0%
2010 8.6% 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 2019 was the strongest year for VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

SCHF vs. VLUE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHF $10,000 $13,865 6.43%
VLUE $10,000 $17,247 8.91%

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 VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.

SCHF’s CAGR is 2.48 percentage points lower than that of VLUE and as a result, would have yielded $3,382 less on a $10,000 investment. Thus, SCHF performed worse than VLUE by 2.48% annually.


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