SCHX vs. DFAC: What’s The Difference?

The Schwab U.S. Large-Cap ETF (SCHX) and the Dimensional U.S. Core Equity 2 ETF (DFAC) are both among the Top 100 ETFs. SCHX is a Schwab ETFs Large Blend fund and DFAC is a Dimensional Fund Advisors Large Blend fund. So, what’s the difference between SCHX and DFAC? And which fund is better?

The expense ratio of SCHX is 0.16 percentage points lower than DFAC’s (0.03% vs. 0.19%). SCHX also has a higher exposure to the technology sector and a lower standard deviation. Overall, SCHX has provided higher returns than DFAC over the past ten years.

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

Summary

SCHX DFAC
Name Schwab U.S. Large-Cap ETF Dimensional U.S. Core Equity 2 ETF
Category Large Blend Large Blend
Issuer Schwab ETFs Dimensional Fund Advisors
AUM 30.89B 13.53B
Avg. Return 14.60% 13.93%
Div. Yield 1.41% 1.0%
Expense Ratio 0.03% 0.19%

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 Dimensional U.S. Core Equity 2 ETF (DFAC) is a Large Blend fund that is issued by Dimensional Fund Advisors. It currently has 13.53B total assets under management and has yielded an average annual return of 13.93% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.19%.

SCHX’s dividend yield is 0.41% higher than that of DFAC (1.41% vs. 1.0%). Also, SCHX yielded on average 0.67% more per year over the past decade (14.60% vs. 13.93%). The expense ratio of SCHX is 0.16 percentage points lower than DFAC’s (0.03% vs. 0.19%).

Fund Composition

Industry Exposure

SCHX vs. DFAC - Industry Exposure

SCHX DFAC
Technology 25.13% 22.81%
Industrials 8.65% 14.13%
Energy 2.72% 2.67%
Communication Services 11.26% 7.63%
Utilities 2.37% 1.54%
Healthcare 13.04% 12.09%
Consumer Defensive 5.97% 5.94%
Real Estate 3.13% 0.37%
Financial Services 13.82% 16.17%
Consumer Cyclical 11.63% 13.09%
Basic Materials 2.28% 3.56%

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 Dimensional U.S. Core Equity 2 ETF (DFAC) has the most exposure to the Technology sector at 22.81%. This is followed by Financial Services and Industrials at 16.17% and 14.13% respectively. Utilities (1.54%), Energy (2.67%), and Basic Materials (3.56%) only make up 7.77% of the fund’s total assets.

DFAC’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Healthcare, Consumer Cyclical, and Industrials stocks at 5.94%, 7.63%, 12.09%, 13.09%, and 14.13%.

SCHX is 2.32% more exposed to the Technology sector than DFAC (25.13% vs 22.81%). SCHX’s exposure to Financial Services and Healthcare stocks is 2.35% lower and 0.95% higher respectively (13.82% vs. 16.17% and 13.04% vs. 12.09%). In total, Utilities, Energy, and Real Estate also make up 3.64% more of the fund’s holdings compared to DFAC (8.22% vs. 4.58%).

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%.

DFAC - Holdings

DFAC Holdings Weight
Apple Inc 4.7%
Microsoft Corp 3.81%
Amazon.com Inc 2.39%
Johnson & Johnson 1.05%
Facebook Inc Class A 1.05%
JPMorgan Chase & Co 1.0%
Alphabet Inc Class C 0.85%
Alphabet Inc Class A 0.84%
Berkshire Hathaway Inc Class B 0.75%
Visa Inc Class A 0.74%

DFAC’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Johnson & Johnson, and Facebook Inc Class A at 4.7%, 3.81%, 2.39%, 1.05%, and 1.05%.

JPMorgan Chase & Co (1.0%), Alphabet Inc Class C (0.85%), and Alphabet Inc Class A (0.84%) have a slightly smaller but still significant weight. Berkshire Hathaway Inc Class B and Visa Inc Class A are also represented in the DFAC’s holdings at 0.75% and 0.74%.

Risk Analysis

SCHX DFAC
Mean Return 1.24 1.19
R-squared 99.83 95.1
Std. Deviation 13.8 15.55
Alpha -0.14 -2.75
Beta 1.02 1.12
Sharpe Ratio 1.03 0.88
Treynor Ratio 14.06 11.85

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

The Dimensional U.S. Core Equity 2 ETF (DFAC) has a R-squared of 95.1 with a Treynor Ratio of 11.85 and a Standard Deviation of 15.55. Its Mean Return is 1.19 while DFAC’s Sharpe Ratio is 0.88. Furthermore, the fund has a Beta of 1.12 and a Alpha of -2.75.

SCHX’s Mean Return is 0.05 points higher than that of DFAC and its R-squared is 4.73 points higher. With a Standard Deviation of 13.8, SCHX is slightly less volatile than DFAC. The Alpha and Beta of SCHX are 2.61 points higher and 0.10 points lower than DFAC’s Alpha and Beta.

Performance

Annual Returns

SCHX vs. DFAC - Annual Returns

Year SCHX DFAC
2020 20.9% 15.8%
2019 31.4% 29.54%
2018 -4.52% -9.43%
2017 21.91% 18.82%
2016 11.78% 16.31%
2015 1.02% -2.53%
2014 13.33% 9.56%
2013 32.54% 37.55%
2012 16.06% 17.93%
2011 1.61% -1.96%
2010 15.88% 21.67%

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 2013 was the strongest year for DFAC, returning 37.55% on an annual basis. The poorest year for DFAC in the last ten years was 2018, with a yield of -9.43%. Most years the Dimensional U.S. Core Equity 2 ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 15.8%, 16.31%, and 17.93% respectively.

Portfolio Growth

SCHX vs. DFAC - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHX $10,000 $36,987 14.60%
DFAC $10,000 $31,887 13.93%

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 DFAC, the end total would have been $31,887. This equates to a $21,887 profit over 10 years and a compound annual growth rate (CAGR) of 13.93%.

SCHX’s CAGR is 0.67 percentage points higher than that of DFAC and as a result, would have yielded $5,100 more on a $10,000 investment. Thus, SCHX outperformed DFAC by 0.67% annually.


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