Skip to content

SCHX vs. IWN: What’s The Difference?

The Schwab U.S. Large-Cap ETF (SCHX) and the iShares Russell 2000 Value ETF (IWN) are both among the Top 100 ETFs. SCHX is a Schwab ETFs Large Blend fund and IWN is a iShares Small Value fund. So, what’s the difference between SCHX and IWN? And which fund is better?

The expense ratio of SCHX is 0.21 percentage points lower than IWN’s (0.03% vs. 0.24%). SCHX also has a higher exposure to the technology sector and a lower standard deviation. Overall, SCHX has provided higher returns than IWN over the past ten years.

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

SCHXIWN
NameSchwab U.S. Large-Cap ETFiShares Russell 2000 Value ETF
CategoryLarge BlendSmall Value
IssuerSchwab ETFsiShares
AUM30.89B15.48B
Avg. Return14.60%10.96%
Div. Yield1.41%1.26%
Expense Ratio0.03%0.24%

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 2000 Value ETF (IWN) is a Small Value fund that is issued by iShares. It currently has 15.48B total assets under management and has yielded an average annual return of 10.96% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.24%.

SCHX’s dividend yield is 0.15% higher than that of IWN (1.41% vs. 1.26%). Also, SCHX yielded on average 3.64% more per year over the past decade (14.60% vs. 10.96%). The expense ratio of SCHX is 0.21 percentage points lower than IWN’s (0.03% vs. 0.24%).

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. IWN - Industry Exposure

SCHXIWN
Technology25.13%6.02%
Industrials8.65%14.58%
Energy2.72%5.84%
Communication Services11.26%4.17%
Utilities2.37%4.69%
Healthcare13.04%10.94%
Consumer Defensive5.97%3.77%
Real Estate3.13%14.36%
Financial Services13.82%22.97%
Consumer Cyclical11.63%8.39%
Basic Materials2.28%4.29%

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 2000 Value ETF (IWN) has the most exposure to the Financial Services sector at 22.97%. This is followed by Industrials and Real Estate at 14.58% and 14.36% respectively. Communication Services (4.17%), Basic Materials (4.29%), and Utilities (4.69%) only make up 13.15% of the fund’s total assets.

IWN’s mid-section with moderate exposure is comprised of Energy, Technology, Consumer Cyclical, Healthcare, and Real Estate stocks at 5.84%, 6.02%, 8.39%, 10.94%, and 14.36%.

SCHX is 19.11% more exposed to the Technology sector than IWN (25.13% vs 6.02%). SCHX’s exposure to Financial Services and Healthcare stocks is 9.15% lower and 2.10% higher respectively (13.82% vs. 22.97% and 13.04% vs. 10.94%). In total, Utilities, Energy, and Real Estate also make up 16.67% less of the fund’s holdings compared to IWN (8.22% vs. 24.89%).

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%.

IWN - Holdings

IWN HoldingsWeight
AMC Entertainment Holdings Inc Class A1.06%
Tenet Healthcare Corp0.47%
Stag Industrial Inc0.47%
Ovintiv Inc0.45%
EMCOR Group Inc0.42%
Valley National Bancorp0.37%
Chesapeake Energy Corp Ordinary Shares – New0.37%
Agree Realty Corp0.36%
Macy’s Inc0.35%
Essent Group Ltd0.35%

IWN’s Top Holdings are AMC Entertainment Holdings Inc Class A, Tenet Healthcare Corp, Stag Industrial Inc, Ovintiv Inc, and EMCOR Group Inc at 1.06%, 0.47%, 0.47%, 0.45%, and 0.42%.

Valley National Bancorp (0.37%), Chesapeake Energy Corp Ordinary Shares – New (0.37%), and Agree Realty Corp (0.36%) have a slightly smaller but still significant weight. Macy’s Inc and Essent Group Ltd are also represented in the IWN’s holdings at 0.35% and 0.35%.

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

SCHXIWN
Mean Return1.241.01
R-squared99.8372.64
Std. Deviation13.819.28
Alpha-0.14-6.32
Beta1.021.21
Sharpe Ratio1.030.59
Treynor Ratio14.068.3

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

The iShares Russell 2000 Value ETF (IWN) has a R-squared of 72.64 with a Standard Deviation of 19.28 and a Sharpe Ratio of 0.59. Its Beta is 1.21 while IWN’s Alpha is -6.32. Furthermore, the fund has a Treynor Ratio of 8.3 and a Mean Return of 1.01.

SCHX’s Mean Return is 0.23 points higher than that of IWN and its R-squared is 27.19 points higher. With a Standard Deviation of 13.8, SCHX is slightly less volatile than IWN. The Alpha and Beta of SCHX are 6.18 points higher and 0.19 points lower than IWN’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. IWN - Annual Returns

YearSCHXIWN
202020.9%4.5%
201931.4%22.17%
2018-4.52%-12.94%
201721.91%7.73%
201611.78%31.64%
20151.02%-7.53%
201413.33%4.13%
201332.54%34.3%
201216.06%17.92%
20111.61%-5.64%
201015.88%24.29%

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 IWN, returning 34.3% on an annual basis. The poorest year for IWN in the last ten years was 2018, with a yield of -12.94%. Most years the iShares Russell 2000 Value ETF has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 4.5%, 7.73%, and 17.92% respectively.

Portfolio Growth

SCHX vs. IWN - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
SCHX$10,000$36,98714.60%
IWN$10,000$22,68010.96%

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 IWN, the end total would have been $22,680. This equates to a $12,680 profit over 10 years and a compound annual growth rate (CAGR) of 10.96%.

SCHX’s CAGR is 3.64 percentage points higher than that of IWN and as a result, would have yielded $14,307 more on a $10,000 investment. Thus, SCHX outperformed IWN by 3.64% 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.