SCHG vs. IUSB: What’s The Difference?

The Schwab U.S. Large-Cap Growth ETF (SCHG) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. SCHG is a Schwab ETFs Large Growth fund and IUSB is a iShares N/A fund. So, what’s the difference between SCHG and IUSB? And which fund is better?

The expense ratio of SCHG is 0.02 percentage points lower than IUSB’s (0.04% vs. 0.06%). SCHG also has a high exposure to the technology sector while IUSB is mostly comprised of AAA bonds. Overall, SCHG has provided higher returns than IUSB over the past 6 years.

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

Summary

SCHG IUSB
Name Schwab U.S. Large-Cap Growth ETF iShares Core Total USD Bond Market ETF
Category Large Growth N/A
Issuer Schwab ETFs iShares
AUM 15.16B 14.49B
Avg. Return 17.81% 4.13%
Div. Yield 0.43% 2.1%
Expense Ratio 0.04% 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%.

The iShares Core Total USD Bond Market ETF (IUSB) is a N/A fund that is issued by iShares. It currently has 14.49B total assets under management and has yielded an average annual return of 4.13% over the past 10 years. The fund has a dividend yield of 2.1% with an expense ratio of 0.06%.

SCHG’s dividend yield is 1.67% lower than that of IUSB (0.43% vs. 2.1%). Also, SCHG yielded on average 13.68% more per year over the past decade (17.81% vs. 4.13%). The expense ratio of SCHG is 0.02 percentage points lower than IUSB’s (0.04% vs. 0.06%).

Fund Composition

Holdings

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%.

IUSB - Holdings

IUSB Bond Sectors Weight
AAA 58.32%
BBB 16.98%
A 12.27%
BB 4.33%
AA 3.36%
B 2.8%
Others 1.01%
Below B 0.92%
US Government 0.0%

IUSB’s Top Bond Sectors are ratings of AAA, BBB, A, BB, and AA at 58.32%, 16.98%, 12.27%, 4.33%, and 3.36%. The fund is less weighted towards B (2.8%), Others (1.01%), and Below B (0.92%) rated bonds.

Risk Analysis

SCHG IUSB
Mean Return 1.46 0
R-squared 92.92 0
Std. Deviation 14.78 0
Alpha 1.97 0
Beta 1.05 0
Sharpe Ratio 1.14 0
Treynor Ratio 16.3 0

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

The iShares Core Total USD Bond Market ETF (IUSB) has a Sharpe Ratio of 0 with a Mean Return of 0 and a Standard Deviation of 0. Its R-squared is 0 while IUSB’s Alpha is 0. Furthermore, the fund has a Beta of 0 and a Treynor Ratio of 0.

SCHG’s Mean Return is 1.46 points higher than that of IUSB and its R-squared is 92.92 points higher. With a Standard Deviation of 14.78, SCHG is slightly more volatile than IUSB. The Alpha and Beta of SCHG are 1.97 points higher and 1.05 points higher than IUSB’s Alpha and Beta.

Performance

Annual Returns

SCHG vs. IUSB - Annual Returns

Year SCHG IUSB
2020 39.13% 7.59%
2019 36.21% 9.26%
2018 -1.35% -0.38%
2017 28.04% 4.06%
2016 6.76% 3.78%
2015 3.26% 0.46%
2014 15.74% 0.0%
2013 33.96% 0.0%
2012 17.02% 0.0%
2011 -0.67% 0.0%
2010 16.83% 0.0%

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 2019 was the strongest year for IUSB, returning 9.26% on an annual basis. The poorest year for IUSB in the last ten years was 2018, with a yield of -0.38%. Most years the iShares Core Total USD Bond Market ETF has given investors modest returns, such as in 2011, 2010, and 2015, when gains were 0.0%, 0.0%, and 0.46% respectively.

Portfolio Growth

SCHG vs. IUSB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHG $10,000 $26,388 17.81%
IUSB $10,000 $12,704 4.13%

A $10,000 investment in SCHG would have resulted in a final balance of $26,388. This is a profit of $16,388 over 6 years and amounts to a compound annual growth rate (CAGR) of 17.81%.

With a $10,000 investment in IUSB, the end total would have been $12,704. This equates to a $2,704 profit over 6 years and a compound annual growth rate (CAGR) of 4.13%.

SCHG’s CAGR is 13.68 percentage points higher than that of IUSB and as a result, would have yielded $13,684 more on a $10,000 investment. Thus, SCHG outperformed IUSB by 13.68% annually.


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