Skip to content

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.

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

SCHXIAU
NameSchwab U.S. Large-Cap ETFiShares Gold Trust
CategoryLarge BlendN/A
IssuerSchwab ETFsiShares
AUM30.89B28.61B
Avg. Return14.60%6.03%
Div. Yield1.41%0.0%
Expense Ratio0.03%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%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

SCHX vs. IAU - Industry Exposure

SCHXIAU
Technology25.13%0.0%
Industrials8.65%0.0%
Energy2.72%0.0%
Communication Services11.26%0.0%
Utilities2.37%0.0%
Healthcare13.04%0.0%
Consumer Defensive5.97%0.0%
Real Estate3.13%0.0%
Financial Services13.82%0.0%
Consumer Cyclical11.63%0.0%
Basic Materials2.28%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 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%.

IAU - Holdings

IAU HoldingsWeight
Gold100.0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%
N/A0%

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%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

SCHXIAU
Mean Return1.240.23
R-squared99.8316.03
Std. Deviation13.816.97
Alpha-0.144.16
Beta1.020.48
Sharpe Ratio1.030.13
Treynor Ratio14.061.5

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.

FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!

Performance

Annual Returns

SCHX vs. IAU - Annual Returns

YearSCHXIAU
202020.9%23.86%
201931.4%18.54%
2018-4.52%-1.39%
201721.91%11.58%
201611.78%8.85%
20151.02%-11.65%
201413.33%-0.44%
201332.54%-27.96%
201216.06%8.37%
20111.61%8.66%
201015.88%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

FundInitial BalanceFinal BalanceCAGR
SCHX$10,000$36,98714.60%
IAU$10,000$13,1216.03%

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.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!

2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.

5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply

Your email address will not be published.