The Schwab U.S. Large-Cap Growth ETF (SCHG) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. SCHG is a Schwab ETFs Large Growth fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between SCHG and EFV? And which fund is better?
The expense ratio of SCHG is 0.35 percentage points lower than EFV’s (0.04% vs. 0.39%). SCHG also has a higher exposure to the technology sector and a lower standard deviation. Overall, SCHG has provided higher returns than EFV over the past 10 years.
In this article, we’ll compare SCHG vs. EFV. We’ll look at annual returns and holdings, as well as at their risk metrics and fund composition. Moreover, I’ll also discuss SCHG’s and EFV’s performance, portfolio growth, and industry exposure and examine how these affect their overall returns.
|Name||Schwab U.S. Large-Cap Growth ETF||iShares MSCI EAFE Value ETF|
|Category||Large Growth||Foreign Large Value|
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 iShares MSCI EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.
SCHG’s dividend yield is 2.51% lower than that of EFV (0.43% vs. 2.94%). Also, SCHG yielded on average 13.82% more per year over the past decade (17.81% vs. 3.99%). The expense ratio of SCHG is 0.35 percentage points lower than EFV’s (0.04% vs. 0.39%).
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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%.
The iShares MSCI EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.
EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.
SCHG is 36.23% more exposed to the Technology sector than EFV (39.21% vs 2.98%). SCHG’s exposure to Communication Services and Consumer Cyclical stocks is 10.61% higher and 6.01% higher respectively (17.07% vs. 6.46% and 15.01% vs. 9.0%). In total, Energy, Real Estate, and Basic Materials also make up 17.73% less of the fund’s holdings compared to EFV (3.52% vs. 21.25%).
|Facebook Inc A||4.45%|
|Alphabet Inc A||3.93%|
|Alphabet Inc Class C||3.82%|
|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%.
|Toyota Motor Corp||2.21%|
|Commonwealth Bank of Australia||1.59%|
|HSBC Holdings PLC||1.4%|
|Rio Tinto PLC||1.1%|
EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.
HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.
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The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Sharpe Ratio of 1.14 with a Standard Deviation of 14.78 and a Beta of 1.05. Its Treynor Ratio is 16.3 while SCHG’s Mean Return is 1.46. Furthermore, the fund has a Alpha of 1.97 and a R-squared of 92.92.
The iShares MSCI EAFE Value ETF (EFV) has a Beta of 1.05 with a Alpha of -1.77 and a Sharpe Ratio of 0.26. Its R-squared is 92.15 while EFV’s Mean Return is 0.42. Furthermore, the fund has a Standard Deviation of 16.53 and a Treynor Ratio of 2.92.
SCHG’s Mean Return is 1.04 points higher than that of EFV and its R-squared is 0.77 points higher. With a Standard Deviation of 14.78, SCHG is slightly less volatile than EFV. The Alpha and Beta of SCHG are 3.74 points higher and 0.00 points lower than EFV’s Alpha and Beta.
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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 2013 was the strongest year for EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 EFV, the end total would have been $13,698. This equates to a $3,698 profit over 10 years and a compound annual growth rate (CAGR) of 3.99%.
SCHG’s CAGR is 13.82 percentage points higher than that of EFV and as a result, would have yielded $33,858 more on a $10,000 investment. Thus, SCHG outperformed EFV by 13.82% annually.
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