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SCHP vs. EFV: What’s The Difference?

The Schwab U.S. TIPS ETF (SCHP) and the iShares MSCI EAFE Value ETF (EFV) are both among the Top 100 ETFs. SCHP is a Schwab ETFs Inflation-Protected Bond fund and EFV is a iShares Foreign Large Value fund. So, what’s the difference between SCHP and EFV? And which fund is better?

The expense ratio of SCHP is 0.34 percentage points lower than EFV’s (0.05% vs. 0.39%). SCHP is mostly comprised of AAA bonds while EFV has a high exposure to the financial services sector. Overall, SCHP has provided lower returns than EFV over the past 10 years.

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

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Summary

SCHPEFV
NameSchwab U.S. TIPS ETFiShares MSCI EAFE Value ETF
CategoryInflation-Protected BondForeign Large Value
IssuerSchwab ETFsiShares
AUM18.41B14.37B
Avg. Return3.92%3.99%
Div. Yield1.97%2.94%
Expense Ratio0.05%0.39%

The Schwab U.S. TIPS ETF (SCHP) is a Inflation-Protected Bond fund that is issued by Schwab ETFs. It currently has 18.41B total assets under management and has yielded an average annual return of 3.92% over the past 10 years. The fund has a dividend yield of 1.97% with an expense ratio of 0.05%.

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%.

SCHP’s dividend yield is 0.97% lower than that of EFV (1.97% vs. 2.94%). Also, SCHP yielded on average 0.08% less per year over the past decade (3.92% vs. 3.99%). The expense ratio of SCHP is 0.34 percentage points lower than EFV’s (0.05% vs. 0.39%).

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Fund Composition

Holdings

SCHP - Holdings

SCHP Bond SectorsWeight
AAA100.0%
Others0.0%
Below B0.0%
B0.0%
BB0.0%
BBB0.0%
A0.0%
AA0.0%
US Government0.0%

SCHP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.

EFV - Holdings

EFV HoldingsWeight
Novartis AG2.41%
Toyota Motor Corp2.21%
Commonwealth Bank of Australia1.59%
Siemens AG1.45%
Sanofi SA1.42%
HSBC Holdings PLC1.4%
TotalEnergies SE1.35%
Allianz SE1.23%
GlaxoSmithKline PLC1.18%
Rio Tinto PLC1.1%

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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Risk Analysis

SCHPEFV
Mean Return0.280.42
R-squared66.1692.15
Std. Deviation4.3216.53
Alpha-0.5-1.77
Beta1.171.05
Sharpe Ratio0.640.26
Treynor Ratio2.312.92

The Schwab U.S. TIPS ETF (SCHP) has a R-squared of 66.16 with a Standard Deviation of 4.32 and a Sharpe Ratio of 0.64. Its Treynor Ratio is 2.31 while SCHP’s Beta is 1.17. Furthermore, the fund has a Mean Return of 0.28 and a Alpha of -0.5.

The iShares MSCI EAFE Value ETF (EFV) has a Standard Deviation of 16.53 with a Sharpe Ratio of 0.26 and a Treynor Ratio of 2.92. Its Mean Return is 0.42 while EFV’s Alpha is -1.77. Furthermore, the fund has a R-squared of 92.15 and a Beta of 1.05.

SCHP’s Mean Return is 0.14 points lower than that of EFV and its R-squared is 25.99 points lower. With a Standard Deviation of 4.32, SCHP is slightly less volatile than EFV. The Alpha and Beta of SCHP are 1.27 points higher and 0.12 points higher than EFV’s Alpha and Beta.

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Performance

Annual Returns

SCHP vs. EFV - Annual Returns

YearSCHPEFV
202010.94%-2.78%
20198.36%15.97%
2018-1.31%-14.88%
20172.95%21.22%
20164.6%4.87%
2015-1.5%-5.89%
20143.56%-5.65%
2013-8.66%22.61%
20126.83%17.52%
201113.38%-12.24%
20100.0%3.18%

SCHP had its best year in 2011 with an annual return of 13.38%. SCHP’s worst year over the past decade yielded -8.66% and occurred in 2013. In most years the Schwab U.S. TIPS ETF provided moderate returns such as in 2017, 2014, and 2016 where annual returns amounted to 2.95%, 3.56%, and 4.6% 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.

Portfolio Growth

SCHP vs. EFV - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
SCHP$10,000$14,4183.92%
EFV$10,000$13,6983.99%

A $10,000 investment in SCHP would have resulted in a final balance of $14,418. This is a profit of $4,418 over 10 years and amounts to a compound annual growth rate (CAGR) of 3.92%.

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%.

SCHP’s CAGR is 0.08 percentage points lower than that of EFV and as a result, would have yielded $720 more on a $10,000 investment. Thus, SCHP performed worse than EFV by 0.08% annually.


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