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SCHX vs. ACWI: What’s The Difference?

The Schwab U.S. Large-Cap ETF (SCHX) and the iShares MSCI ACWI ETF (ACWI) are both among the Top 100 ETFs. SCHX is a Schwab ETFs Large Blend fund and ACWI is a iShares N/A fund. So, what’s the difference between SCHX and ACWI? And which fund is better?

The expense ratio of SCHX is 0.29 percentage points lower than ACWI’s (0.03% vs. 0.32%). SCHX also has a higher exposure to the technology sector and a lower standard deviation. Overall, SCHX has provided higher returns than ACWI over the past ten years.

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

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Summary

SCHXACWI
NameSchwab U.S. Large-Cap ETFiShares MSCI ACWI ETF
CategoryLarge BlendN/A
IssuerSchwab ETFsiShares
AUM30.89B16.85B
Avg. Return14.60%10.21%
Div. Yield1.41%1.39%
Expense Ratio0.03%0.32%

The Schwab U.S. Large-Cap ETF (SCHX) is a Large Blend fund that is issued by Schwab ETFs. It currently has 30.89B total assets under management and has yielded an average annual return of 14.60% over the past 10 years. The fund has a dividend yield of 1.41% with an expense ratio of 0.03%.

The iShares MSCI ACWI ETF (ACWI) is a N/A fund that is issued by iShares. It currently has 16.85B total assets under management and has yielded an average annual return of 10.21% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.32%.

SCHX’s dividend yield is 0.02% higher than that of ACWI (1.41% vs. 1.39%). Also, SCHX yielded on average 4.39% more per year over the past decade (14.60% vs. 10.21%). The expense ratio of SCHX is 0.29 percentage points lower than ACWI’s (0.03% vs. 0.32%).

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Fund Composition

Industry Exposure

SCHX vs. ACWI - Industry Exposure

SCHXACWI
Technology25.13%20.41%
Industrials8.65%9.65%
Energy2.72%3.48%
Communication Services11.26%9.87%
Utilities2.37%2.61%
Healthcare13.04%11.74%
Consumer Defensive5.97%7.15%
Real Estate3.13%2.75%
Financial Services13.82%15.58%
Consumer Cyclical11.63%12.01%
Basic Materials2.28%4.73%

The Schwab U.S. Large-Cap ETF (SCHX) has the most exposure to the Technology sector at 25.13%. This is followed by Financial Services and Healthcare at 13.82% and 13.04% respectively. Utilities (2.37%), Energy (2.72%), and Real Estate (3.13%) only make up 8.22% of the fund’s total assets.

SCHX’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.65%, 11.26%, 11.63%, and 13.04%.

The iShares MSCI ACWI ETF (ACWI) has the most exposure to the Technology sector at 20.41%. This is followed by Financial Services and Consumer Cyclical at 15.58% and 12.01% respectively. Real Estate (2.75%), Energy (3.48%), and Basic Materials (4.73%) only make up 10.96% of the fund’s total assets.

ACWI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Healthcare, and Consumer Cyclical stocks at 7.15%, 9.65%, 9.87%, 11.74%, and 12.01%.

SCHX is 4.72% more exposed to the Technology sector than ACWI (25.13% vs 20.41%). SCHX’s exposure to Financial Services and Healthcare stocks is 1.76% lower and 1.30% higher respectively (13.82% vs. 15.58% and 13.04% vs. 11.74%). In total, Utilities, Energy, and Real Estate also make up 0.62% less of the fund’s holdings compared to ACWI (8.22% vs. 8.84%).

Holdings

SCHX - Holdings

SCHX HoldingsWeight
Apple Inc5.37%
Microsoft Corp5.1%
Amazon.com Inc3.69%
Facebook Inc A2.08%
Alphabet Inc A1.84%
Alphabet Inc Class C1.78%
Berkshire Hathaway Inc Class B1.32%
Tesla Inc1.31%
NVIDIA Corp1.25%
JPMorgan Chase & Co1.18%

SCHX’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 5.37%, 5.1%, 3.69%, 2.08%, and 1.84%.

Alphabet Inc Class C (1.78%), Berkshire Hathaway Inc Class B (1.32%), and Tesla Inc (1.31%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHX’s holdings at 1.25% and 1.18%.

ACWI - Holdings

ACWI HoldingsWeight
Apple Inc3.44%
Microsoft Corp2.91%
Amazon.com Inc2.21%
Facebook Inc A1.25%
Alphabet Inc Class C1.12%
Alphabet Inc A1.09%
Taiwan Semiconductor Manufacturing Co Ltd0.79%
Tesla Inc0.78%
NVIDIA Corp0.74%
JPMorgan Chase & Co0.71%

ACWI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc Class C at 3.44%, 2.91%, 2.21%, 1.25%, and 1.12%.

Alphabet Inc A (1.09%), Taiwan Semiconductor Manufacturing Co Ltd (0.79%), and Tesla Inc (0.78%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ACWI’s holdings at 0.74% and 0.71%.

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Risk Analysis

SCHXACWI
Mean Return1.240.89
R-squared99.8399.96
Std. Deviation13.814.05
Alpha-0.140.15
Beta1.021
Sharpe Ratio1.030.71
Treynor Ratio14.069.45

The Schwab U.S. Large-Cap ETF (SCHX) has a Standard Deviation of 13.8 with a Treynor Ratio of 14.06 and a Mean Return of 1.24. Its Sharpe Ratio is 1.03 while SCHX’s R-squared is 99.83. Furthermore, the fund has a Alpha of -0.14 and a Beta of 1.02.

The iShares MSCI ACWI ETF (ACWI) has a Treynor Ratio of 9.45 with a R-squared of 99.96 and a Alpha of 0.15. Its Beta is 1 while ACWI’s Mean Return is 0.89. Furthermore, the fund has a Sharpe Ratio of 0.71 and a Standard Deviation of 14.05.

SCHX’s Mean Return is 0.35 points higher than that of ACWI and its R-squared is 0.13 points lower. With a Standard Deviation of 13.8, SCHX is slightly less volatile than ACWI. The Alpha and Beta of SCHX are 0.29 points lower and 0.02 points higher than ACWI’s Alpha and Beta.

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Performance

Annual Returns

SCHX vs. ACWI - Annual Returns

YearSCHXACWI
202020.9%16.38%
201931.4%26.7%
2018-4.52%-9.15%
201721.91%24.35%
201611.78%8.22%
20151.02%-2.39%
201413.33%4.64%
201332.54%22.91%
201216.06%15.99%
20111.61%-7.6%
201015.88%12.31%

SCHX had its best year in 2013 with an annual return of 32.54%. SCHX’s worst year over the past decade yielded -4.52% and occurred in 2018. In most years the Schwab U.S. Large-Cap ETF provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.33%, 15.88%, and 16.06% respectively.

The year 2019 was the strongest year for ACWI, returning 26.7% on an annual basis. The poorest year for ACWI in the last ten years was 2018, with a yield of -9.15%. Most years the iShares MSCI ACWI ETF has given investors modest returns, such as in 2016, 2010, and 2012, when gains were 8.22%, 12.31%, and 15.99% respectively.

Portfolio Growth

SCHX vs. ACWI - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
SCHX$10,000$36,98714.60%
ACWI$10,000$24,25510.21%

A $10,000 investment in SCHX would have resulted in a final balance of $36,987. This is a profit of $26,987 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.60%.

With a $10,000 investment in ACWI, the end total would have been $24,255. This equates to a $14,255 profit over 10 years and a compound annual growth rate (CAGR) of 10.21%.

SCHX’s CAGR is 4.39 percentage points higher than that of ACWI and as a result, would have yielded $12,732 more on a $10,000 investment. Thus, SCHX outperformed ACWI by 4.39% annually.


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