SCHX vs. EFV: What’s The Difference?

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

The expense ratio of SCHX is 0.36 percentage points lower than EFV’s (0.03% vs. 0.39%). SCHX also has a higher exposure to the technology sector and a lower standard deviation. Overall, SCHX has provided higher returns than EFV over the past ten years.

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

Summary

SCHX EFV
Name Schwab U.S. Large-Cap ETF iShares MSCI EAFE Value ETF
Category Large Blend Foreign Large Value
Issuer Schwab ETFs iShares
AUM 30.89B 14.37B
Avg. Return 14.60% 3.99%
Div. Yield 1.41% 2.94%
Expense Ratio 0.03% 0.39%

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 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%.

SCHX’s dividend yield is 1.53% lower than that of EFV (1.41% vs. 2.94%). Also, SCHX yielded on average 10.61% more per year over the past decade (14.60% vs. 3.99%). The expense ratio of SCHX is 0.36 percentage points lower than EFV’s (0.03% vs. 0.39%).

Fund Composition

Industry Exposure

SCHX vs. EFV - Industry Exposure

SCHX EFV
Technology 25.13% 2.98%
Industrials 8.65% 11.6%
Energy 2.72% 6.6%
Communication Services 11.26% 6.46%
Utilities 2.37% 6.14%
Healthcare 13.04% 9.19%
Consumer Defensive 5.97% 6.82%
Real Estate 3.13% 5.06%
Financial Services 13.82% 26.55%
Consumer Cyclical 11.63% 9.0%
Basic Materials 2.28% 9.59%

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 EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.

EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.

SCHX is 22.15% more exposed to the Technology sector than EFV (25.13% vs 2.98%). SCHX’s exposure to Financial Services and Healthcare stocks is 12.73% lower and 3.85% higher respectively (13.82% vs. 26.55% and 13.04% vs. 9.19%). In total, Utilities, Energy, and Real Estate also make up 9.58% less of the fund’s holdings compared to EFV (8.22% vs. 17.80%).

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%.

EFV - Holdings

EFV Holdings Weight
Novartis AG 2.41%
Toyota Motor Corp 2.21%
Commonwealth Bank of Australia 1.59%
Siemens AG 1.45%
Sanofi SA 1.42%
HSBC Holdings PLC 1.4%
TotalEnergies SE 1.35%
Allianz SE 1.23%
GlaxoSmithKline PLC 1.18%
Rio Tinto PLC 1.1%

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%.

Risk Analysis

SCHX EFV
Mean Return 1.24 0.42
R-squared 99.83 92.15
Std. Deviation 13.8 16.53
Alpha -0.14 -1.77
Beta 1.02 1.05
Sharpe Ratio 1.03 0.26
Treynor Ratio 14.06 2.92

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

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

SCHX’s Mean Return is 0.82 points higher than that of EFV and its R-squared is 7.68 points higher. With a Standard Deviation of 13.8, SCHX is slightly less volatile than EFV. The Alpha and Beta of SCHX are 1.63 points higher and 0.03 points lower than EFV’s Alpha and Beta.

Performance

Annual Returns

SCHX vs. EFV - Annual Returns

Year SCHX EFV
2020 20.9% -2.78%
2019 31.4% 15.97%
2018 -4.52% -14.88%
2017 21.91% 21.22%
2016 11.78% 4.87%
2015 1.02% -5.89%
2014 13.33% -5.65%
2013 32.54% 22.61%
2012 16.06% 17.52%
2011 1.61% -12.24%
2010 15.88% 3.18%

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 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

SCHX vs. EFV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHX $10,000 $36,987 14.60%
EFV $10,000 $13,698 3.99%

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 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%.

SCHX’s CAGR is 10.61 percentage points higher than that of EFV and as a result, would have yielded $23,289 more on a $10,000 investment. Thus, SCHX outperformed EFV by 10.61% annually.


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