SCHX vs. BIV: What’s The Difference?

The Schwab U.S. Large-Cap ETF (SCHX) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. SCHX is a Schwab ETFs Large Blend fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between SCHX and BIV? And which fund is better?

The expense ratio of SCHX is 0.02 percentage points lower than BIV’s (0.03% vs. 0.05%). SCHX also has a high exposure to the technology sector while BIV is mostly comprised of AAA bonds. Overall, SCHX has provided higher returns than BIV over the past ten years.

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

Summary

SCHX BIV
Name Schwab U.S. Large-Cap ETF Vanguard Intermediate-Term Bond Index Fund ETF Shares
Category Large Blend Intermediate-Term Bond
Issuer Schwab ETFs Vanguard
AUM 30.89B 39.05B
Avg. Return 14.60% 5.31%
Div. Yield 1.41% 2.06%
Expense Ratio 0.03% 0.05%

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 Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 39.05B total assets under management and has yielded an average annual return of 5.31% over the past 10 years. The fund has a dividend yield of 2.06% with an expense ratio of 0.05%.

SCHX’s dividend yield is 0.65% lower than that of BIV (1.41% vs. 2.06%). Also, SCHX yielded on average 9.29% more per year over the past decade (14.60% vs. 5.31%). The expense ratio of SCHX is 0.02 percentage points lower than BIV’s (0.03% vs. 0.05%).

Fund Composition

Holdings

SCHX - Holdings

SCHX Holdings Weight
Apple Inc 5.37%
Microsoft Corp 5.1%
Amazon.com Inc 3.69%
Facebook Inc A 2.08%
Alphabet Inc A 1.84%
Alphabet Inc Class C 1.78%
Berkshire Hathaway Inc Class B 1.32%
Tesla Inc 1.31%
NVIDIA Corp 1.25%
JPMorgan Chase & Co 1.18%

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%.

BIV - Holdings

BIV Bond Sectors Weight
AAA 54.51%
BBB 25.24%
A 16.97%
AA 3.1%
Others 0.15%
Below B 0.03%
B 0.0%
BB 0.0%
US Government 0.0%

BIV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 54.51%, 25.24%, 16.97%, 3.1%, and 0.15%. The fund is less weighted towards Below B (0.03%), B (0.0%), and BB (0.0%) rated bonds.

Risk Analysis

SCHX BIV
Mean Return 1.24 0.35
R-squared 99.83 95.12
Std. Deviation 13.8 4.09
Alpha -0.14 -0.07
Beta 1.02 1.33
Sharpe Ratio 1.03 0.89
Treynor Ratio 14.06 2.72

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

The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) has a Treynor Ratio of 2.72 with a Standard Deviation of 4.09 and a R-squared of 95.12. Its Sharpe Ratio is 0.89 while BIV’s Beta is 1.33. Furthermore, the fund has a Mean Return of 0.35 and a Alpha of -0.07.

SCHX’s Mean Return is 0.89 points higher than that of BIV and its R-squared is 4.71 points higher. With a Standard Deviation of 13.8, SCHX is slightly more volatile than BIV. The Alpha and Beta of SCHX are 0.07 points lower and 0.31 points lower than BIV’s Alpha and Beta.

Performance

Annual Returns

SCHX vs. BIV - Annual Returns

Year SCHX BIV
2020 20.9% 9.71%
2019 31.4% 10.19%
2018 -4.52% -0.09%
2017 21.91% 3.8%
2016 11.78% 2.86%
2015 1.02% 1.23%
2014 13.33% 7.0%
2013 32.54% -3.44%
2012 16.06% 7.02%
2011 1.61% 10.62%
2010 15.88% 9.55%

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 2011 was the strongest year for BIV, returning 10.62% on an annual basis. The poorest year for BIV in the last ten years was 2013, with a yield of -3.44%. Most years the Vanguard Intermediate-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 3.8%, 7.0%, and 7.02% respectively.

Portfolio Growth

SCHX vs. BIV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHX $10,000 $36,987 14.60%
BIV $10,000 $15,967 5.31%

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 BIV, the end total would have been $15,967. This equates to a $5,967 profit over 10 years and a compound annual growth rate (CAGR) of 5.31%.

SCHX’s CAGR is 9.29 percentage points higher than that of BIV and as a result, would have yielded $21,020 more on a $10,000 investment. Thus, SCHX outperformed BIV by 9.29% annually.


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