SCHX vs. IWB: What’s The Difference?

The Schwab U.S. Large-Cap ETF (SCHX) and the iShares Russell 1000 ETF (IWB) are both among the Top 100 ETFs. SCHX is a Schwab ETFs Large Blend fund and IWB is a iShares Large Blend fund. So, what’s the difference between SCHX and IWB? And which fund is better?

The expense ratio of SCHX is 0.12 percentage points lower than IWB’s (0.03% vs. 0.15%). SCHX also has a lower exposure to the technology sector and a lower standard deviation. Overall, SCHX has provided lower returns than IWB over the past ten years.

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

Summary

SCHX IWB
Name Schwab U.S. Large-Cap ETF iShares Russell 1000 ETF
Category Large Blend Large Blend
Issuer Schwab ETFs iShares
AUM 30.89B 30.54B
Avg. Return 14.60% 14.64%
Div. Yield 1.41% 1.14%
Expense Ratio 0.03% 0.15%

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 Russell 1000 ETF (IWB) is a Large Blend fund that is issued by iShares. It currently has 30.54B total assets under management and has yielded an average annual return of 14.64% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.15%.

SCHX’s dividend yield is 0.27% higher than that of IWB (1.41% vs. 1.14%). Also, SCHX yielded on average 0.03% less per year over the past decade (14.60% vs. 14.64%). The expense ratio of SCHX is 0.12 percentage points lower than IWB’s (0.03% vs. 0.15%).

Fund Composition

Industry Exposure

SCHX vs. IWB - Industry Exposure

SCHX IWB
Technology 25.13% 25.33%
Industrials 8.65% 8.88%
Energy 2.72% 2.44%
Communication Services 11.26% 10.83%
Utilities 2.37% 2.36%
Healthcare 13.04% 13.35%
Consumer Defensive 5.97% 5.97%
Real Estate 3.13% 3.34%
Financial Services 13.82% 13.64%
Consumer Cyclical 11.63% 11.85%
Basic Materials 2.28% 2.02%

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 Russell 1000 ETF (IWB) has the most exposure to the Technology sector at 25.33%. This is followed by Financial Services and Healthcare at 13.64% and 13.35% respectively. Utilities (2.36%), Energy (2.44%), and Real Estate (3.34%) only make up 8.14% of the fund’s total assets.

IWB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.88%, 10.83%, 11.85%, and 13.35%.

SCHX is 0.20% less exposed to the Technology sector than IWB (25.13% vs 25.33%). SCHX’s exposure to Financial Services and Healthcare stocks is 0.18% higher and 0.31% lower respectively (13.82% vs. 13.64% and 13.04% vs. 13.35%). In total, Utilities, Energy, and Real Estate also make up 0.08% more of the fund’s holdings compared to IWB (8.22% vs. 8.14%).

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%.

IWB - Holdings

IWB Holdings Weight
Apple Inc 5.45%
Microsoft Corp 5.11%
Amazon.com Inc 3.43%
Facebook Inc Class A 2.03%
Alphabet Inc Class A 1.93%
Alphabet Inc Class C 1.82%
Tesla Inc 1.27%
Berkshire Hathaway Inc Class B 1.24%
NVIDIA Corp 1.11%
JPMorgan Chase & Co 1.09%

IWB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.45%, 5.11%, 3.43%, 2.03%, and 1.93%.

Alphabet Inc Class C (1.82%), Tesla Inc (1.27%), and Berkshire Hathaway Inc Class B (1.24%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the IWB’s holdings at 1.11% and 1.09%.

Risk Analysis

SCHX IWB
Mean Return 1.24 1.27
R-squared 99.83 99.73
Std. Deviation 13.8 13.87
Alpha -0.14 -0.38
Beta 1.02 1.02
Sharpe Ratio 1.03 1.05
Treynor Ratio 14.06 14.31

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

The iShares Russell 1000 ETF (IWB) has a Alpha of -0.38 with a Treynor Ratio of 14.31 and a R-squared of 99.73. Its Mean Return is 1.27 while IWB’s Standard Deviation is 13.87. Furthermore, the fund has a Beta of 1.02 and a Sharpe Ratio of 1.05.

SCHX’s Mean Return is 0.03 points lower than that of IWB and its R-squared is 0.10 points higher. With a Standard Deviation of 13.8, SCHX is slightly less volatile than IWB. The Alpha and Beta of SCHX are 0.24 points higher and 0.00 points lower than IWB’s Alpha and Beta.

Performance

Annual Returns

SCHX vs. IWB - Annual Returns

Year SCHX IWB
2020 20.9% 20.8%
2019 31.4% 31.26%
2018 -4.52% -4.91%
2017 21.91% 21.53%
2016 11.78% 11.91%
2015 1.02% 0.82%
2014 13.33% 13.08%
2013 32.54% 32.93%
2012 16.06% 16.27%
2011 1.61% 1.36%
2010 15.88% 15.94%

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 IWB, returning 32.93% on an annual basis. The poorest year for IWB in the last ten years was 2018, with a yield of -4.91%. Most years the iShares Russell 1000 ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.08%, 15.94%, and 16.27% respectively.

Portfolio Growth

SCHX vs. IWB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHX $10,000 $36,987 14.60%
IWB $10,000 $36,624 14.64%

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 IWB, the end total would have been $36,624. This equates to a $26,624 profit over 10 years and a compound annual growth rate (CAGR) of 14.64%.

SCHX’s CAGR is 0.03 percentage points lower than that of IWB and as a result, would have yielded $363 more on a $10,000 investment. Thus, SCHX performed worse than IWB by 0.03% annually.


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