The Schwab U.S. Large-Cap Growth ETF (SCHG) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. SCHG is a Schwab ETFs Large Growth fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between SCHG and IWP? And which fund is better?
The expense ratio of SCHG is 0.20 percentage points lower than IWP’s (0.04% vs. 0.24%). SCHG also has a higher exposure to the technology sector and a lower standard deviation. Overall, SCHG has provided higher returns than IWP over the past 10 years.
In this article, we’ll compare SCHG vs. IWP. We’ll look at portfolio growth and performance, as well as at their fund composition and annual returns. Moreover, I’ll also discuss SCHG’s and IWP’s risk metrics, holdings, and industry exposure and examine how these affect their overall returns.
Summary
| SCHG | IWP | |
| Name | Schwab U.S. Large-Cap Growth ETF | iShares Russell Mid-Cap Growth ETF |
| Category | Large Growth | Mid-Cap Growth |
| Issuer | Schwab ETFs | iShares |
| AUM | 15.16B | 15.7B |
| Avg. Return | 17.81% | 16.75% |
| Div. Yield | 0.43% | 0.26% |
| Expense Ratio | 0.04% | 0.24% |
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 Russell Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.
SCHG’s dividend yield is 0.17% higher than that of IWP (0.43% vs. 0.26%). Also, SCHG yielded on average 1.06% more per year over the past decade (17.81% vs. 16.75%). The expense ratio of SCHG is 0.20 percentage points lower than IWP’s (0.04% vs. 0.24%).
Fund Composition
Industry Exposure
| SCHG | IWP | |
| Technology | 39.21% | 33.88% |
| Industrials | 3.01% | 14.09% |
| Energy | 0.2% | 1.51% |
| Communication Services | 17.07% | 6.32% |
| Utilities | 0.0% | 0.16% |
| Healthcare | 12.05% | 16.79% |
| Consumer Defensive | 2.15% | 2.32% |
| Real Estate | 1.64% | 2.46% |
| Financial Services | 7.98% | 4.52% |
| Consumer Cyclical | 15.01% | 16.09% |
| Basic Materials | 1.68% | 1.86% |
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 Russell Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.
IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.
SCHG is 5.33% more exposed to the Technology sector than IWP (39.21% vs 33.88%). SCHG’s exposure to Communication Services and Consumer Cyclical stocks is 10.75% higher and 1.08% lower respectively (17.07% vs. 6.32% and 15.01% vs. 16.09%). In total, Energy, Real Estate, and Basic Materials also make up 2.31% less of the fund’s holdings compared to IWP (3.52% vs. 5.83%).
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%.
| IWP Holdings | Weight |
| IDEXX Laboratories Inc | 1.3% |
| DocuSign Inc | 1.3% |
| Roku Inc Class A | 1.29% |
| Match Group Inc | 1.06% |
| Chipotle Mexican Grill Inc | 1.06% |
| Pinterest Inc | 1.05% |
| Veeva Systems Inc Class A | 1.04% |
| Palantir Technologies Inc Ordinary Shares – Class A | 1.04% |
| Lululemon Athletica Inc | 1.01% |
| DexCom Inc | 1.0% |
IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.
Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.
Risk Analysis
| SCHG | IWP | |
| Mean Return | 1.46 | 1.27 |
| R-squared | 92.92 | 87.01 |
| Std. Deviation | 14.78 | 16.05 |
| Alpha | 1.97 | -1.03 |
| Beta | 1.05 | 1.1 |
| Sharpe Ratio | 1.14 | 0.91 |
| Treynor Ratio | 16.3 | 12.98 |
The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Sharpe Ratio of 1.14 with a Beta of 1.05 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 R-squared of 92.92 and a Standard Deviation of 14.78.
The iShares Russell Mid-Cap Growth ETF (IWP) has a Alpha of -1.03 with a Mean Return of 1.27 and a Sharpe Ratio of 0.91. Its Standard Deviation is 16.05 while IWP’s R-squared is 87.01. Furthermore, the fund has a Treynor Ratio of 12.98 and a Beta of 1.1.
SCHG’s Mean Return is 0.19 points higher than that of IWP and its R-squared is 5.91 points higher. With a Standard Deviation of 14.78, SCHG is slightly less volatile than IWP. The Alpha and Beta of SCHG are 3.00 points higher and 0.05 points lower than IWP’s Alpha and Beta.
Performance
Annual Returns
| Year | SCHG | IWP |
| 2020 | 39.13% | 35.29% |
| 2019 | 36.21% | 35.14% |
| 2018 | -1.35% | -4.95% |
| 2017 | 28.04% | 24.98% |
| 2016 | 6.76% | 7.15% |
| 2015 | 3.26% | -0.39% |
| 2014 | 15.74% | 11.68% |
| 2013 | 33.96% | 35.44% |
| 2012 | 17.02% | 15.62% |
| 2011 | -0.67% | -1.82% |
| 2010 | 16.83% | 26.1% |
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 IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| SCHG | $10,000 | $47,556 | 17.81% |
| IWP | $10,000 | $39,802 | 16.75% |
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 IWP, the end total would have been $39,802. This equates to a $29,802 profit over 10 years and a compound annual growth rate (CAGR) of 16.75%.
SCHG’s CAGR is 1.06 percentage points higher than that of IWP and as a result, would have yielded $7,754 more on a $10,000 investment. Thus, SCHG outperformed IWP by 1.06% annually.
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