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SCHG vs. BIV: What’s The Difference?

The Schwab U.S. Large-Cap Growth ETF (SCHG) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. SCHG is a Schwab ETFs Large Growth fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between SCHG and BIV? And which fund is better?

The expense ratio of SCHG is 0.01 percentage points lower than BIV’s (0.04% vs. 0.05%). SCHG also has a high exposure to the technology sector while BIV is mostly comprised of AAA bonds. Overall, SCHG has provided higher returns than BIV over the past 10 years.

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

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Summary

SCHGBIV
NameSchwab U.S. Large-Cap Growth ETFVanguard Intermediate-Term Bond Index Fund ETF Shares
CategoryLarge GrowthIntermediate-Term Bond
IssuerSchwab ETFsVanguard
AUM15.16B39.05B
Avg. Return17.81%5.31%
Div. Yield0.43%2.06%
Expense Ratio0.04%0.05%

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%.

The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 39.05B total assets under management and has yielded an average annual return of 5.31% over the past 10 years. The fund has a dividend yield of 2.06% with an expense ratio of 0.05%.

SCHG’s dividend yield is 1.63% lower than that of BIV (0.43% vs. 2.06%). Also, SCHG yielded on average 12.50% more per year over the past decade (17.81% vs. 5.31%). The expense ratio of SCHG is 0.01 percentage points lower than BIV’s (0.04% vs. 0.05%).

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Fund Composition

Holdings

SCHG - Holdings

SCHG HoldingsWeight
Apple Inc11.49%
Microsoft Corp10.91%
Amazon.com Inc7.89%
Facebook Inc A4.45%
Alphabet Inc A3.93%
Alphabet Inc Class C3.82%
Tesla Inc2.8%
NVIDIA Corp2.67%
Visa Inc Class A2.12%
UnitedHealth Group Inc2.02%

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%.

BIV - Holdings

BIV Bond SectorsWeight
AAA54.51%
BBB25.24%
A16.97%
AA3.1%
Others0.15%
Below B0.03%
B0.0%
BB0.0%
US Government0.0%

BIV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 54.51%, 25.24%, 16.97%, 3.1%, and 0.15%. The fund is less weighted towards Below B (0.03%), B (0.0%), and BB (0.0%) rated bonds.

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Risk Analysis

SCHGBIV
Mean Return1.460.35
R-squared92.9295.12
Std. Deviation14.784.09
Alpha1.97-0.07
Beta1.051.33
Sharpe Ratio1.140.89
Treynor Ratio16.32.72

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

The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) has a Sharpe Ratio of 0.89 with a Beta of 1.33 and a Treynor Ratio of 2.72. Its Mean Return is 0.35 while BIV’s R-squared is 95.12. Furthermore, the fund has a Standard Deviation of 4.09 and a Alpha of -0.07.

SCHG’s Mean Return is 1.11 points higher than that of BIV and its R-squared is 2.20 points lower. With a Standard Deviation of 14.78, SCHG is slightly more volatile than BIV. The Alpha and Beta of SCHG are 2.04 points higher and 0.28 points lower than BIV’s Alpha and Beta.

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Performance

Annual Returns

SCHG vs. BIV - Annual Returns

YearSCHGBIV
202039.13%9.71%
201936.21%10.19%
2018-1.35%-0.09%
201728.04%3.8%
20166.76%2.86%
20153.26%1.23%
201415.74%7.0%
201333.96%-3.44%
201217.02%7.02%
2011-0.67%10.62%
201016.83%9.55%

SCHG had its best year in 2020 with an annual return of 39.13%. SCHG’s worst year over the past decade yielded -1.35% and occurred in 2018. In most years the Schwab U.S. Large-Cap Growth ETF provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 15.74%, 16.83%, and 17.02% respectively.

The year 2011 was the strongest year for BIV, returning 10.62% on an annual basis. The poorest year for BIV in the last ten years was 2013, with a yield of -3.44%. Most years the Vanguard Intermediate-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 3.8%, 7.0%, and 7.02% respectively.

Portfolio Growth

SCHG vs. BIV - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
SCHG$10,000$47,55617.81%
BIV$10,000$15,9675.31%

A $10,000 investment in SCHG would have resulted in a final balance of $47,556. This is a profit of $37,556 over 10 years and amounts to a compound annual growth rate (CAGR) of 17.81%.

With a $10,000 investment in BIV, the end total would have been $15,967. This equates to a $5,967 profit over 10 years and a compound annual growth rate (CAGR) of 5.31%.

SCHG’s CAGR is 12.50 percentage points higher than that of BIV and as a result, would have yielded $31,589 more on a $10,000 investment. Thus, SCHG outperformed BIV by 12.50% annually.


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