SCHX vs. IAU: What’s The Difference?

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

The expense ratio of SCHX is 0.22 percentage points lower than IAU’s (0.03% vs. 0.25%). SCHX also has a higher exposure to the technology sector and a lower standard deviation. Overall, SCHX has provided higher returns than IAU over the past ten years.

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

Summary

SCHX IAU
Name Schwab U.S. Large-Cap ETF iShares Gold Trust
Category Large Blend N/A
Issuer Schwab ETFs iShares
AUM 30.89B 28.61B
Avg. Return 14.60% 6.03%
Div. Yield 1.41% 0.0%
Expense Ratio 0.03% 0.25%

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 Gold Trust (IAU) is a N/A fund that is issued by iShares. It currently has 28.61B total assets under management and has yielded an average annual return of 6.03% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.25%.

SCHX’s dividend yield is 1.41% higher than that of IAU (1.41% vs. 0.0%). Also, SCHX yielded on average 8.57% more per year over the past decade (14.60% vs. 6.03%). The expense ratio of SCHX is 0.22 percentage points lower than IAU’s (0.03% vs. 0.25%).

Fund Composition

Industry Exposure

SCHX vs. IAU - Industry Exposure

SCHX IAU
Technology 25.13% 0.0%
Industrials 8.65% 0.0%
Energy 2.72% 0.0%
Communication Services 11.26% 0.0%
Utilities 2.37% 0.0%
Healthcare 13.04% 0.0%
Consumer Defensive 5.97% 0.0%
Real Estate 3.13% 0.0%
Financial Services 13.82% 0.0%
Consumer Cyclical 11.63% 0.0%
Basic Materials 2.28% 0.0%

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 Gold Trust (IAU) has the most exposure to the Technology sector at 0.0%. This is followed by Industrials and Energy at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.

IAU’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Energy stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.

SCHX is 25.13% more exposed to the Technology sector than IAU (25.13% vs 0.0%). SCHX’s exposure to Financial Services and Healthcare stocks is 13.82% higher and 13.04% higher respectively (13.82% vs. 0.0% and 13.04% vs. 0.0%). In total, Utilities, Energy, and Real Estate also make up 8.22% more of the fund’s holdings compared to IAU (8.22% vs. 0.00%).

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%.

IAU - Holdings

IAU Holdings Weight
Gold 100.0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%

IAU’s Top Holdings are Gold, N/A, N/A, N/A, and N/A at 100.0%, 0%, 0%, 0%, and 0%.

N/A (0%), N/A (0%), and N/A (0%) have a slightly smaller but still significant weight. N/A and N/A are also represented in the IAU’s holdings at 0% and 0%.

Risk Analysis

SCHX IAU
Mean Return 1.24 0.23
R-squared 99.83 16.03
Std. Deviation 13.8 16.97
Alpha -0.14 4.16
Beta 1.02 0.48
Sharpe Ratio 1.03 0.13
Treynor Ratio 14.06 1.5

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

The iShares Gold Trust (IAU) has a Treynor Ratio of 1.5 with a Beta of 0.48 and a Standard Deviation of 16.97. Its Sharpe Ratio is 0.13 while IAU’s Mean Return is 0.23. Furthermore, the fund has a Alpha of 4.16 and a R-squared of 16.03.

SCHX’s Mean Return is 1.01 points higher than that of IAU and its R-squared is 83.80 points higher. With a Standard Deviation of 13.8, SCHX is slightly less volatile than IAU. The Alpha and Beta of SCHX are 4.30 points lower and 0.54 points higher than IAU’s Alpha and Beta.

Performance

Annual Returns

SCHX vs. IAU - Annual Returns

Year SCHX IAU
2020 20.9% 23.86%
2019 31.4% 18.54%
2018 -4.52% -1.39%
2017 21.91% 11.58%
2016 11.78% 8.85%
2015 1.02% -11.65%
2014 13.33% -0.44%
2013 32.54% -27.96%
2012 16.06% 8.37%
2011 1.61% 8.66%
2010 15.88% 27.93%

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 2010 was the strongest year for IAU, returning 27.93% on an annual basis. The poorest year for IAU in the last ten years was 2013, with a yield of -27.96%. Most years the iShares Gold Trust has given investors modest returns, such as in 2012, 2011, and 2016, when gains were 8.37%, 8.66%, and 8.85% respectively.

Portfolio Growth

SCHX vs. IAU - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHX $10,000 $36,987 14.60%
IAU $10,000 $13,121 6.03%

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 IAU, the end total would have been $13,121. This equates to a $3,121 profit over 10 years and a compound annual growth rate (CAGR) of 6.03%.

SCHX’s CAGR is 8.57 percentage points higher than that of IAU and as a result, would have yielded $23,866 more on a $10,000 investment. Thus, SCHX outperformed IAU by 8.57% annually.


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