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

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

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

Summary

SCHXIWP
NameSchwab U.S. Large-Cap ETFiShares Russell Mid-Cap Growth ETF
CategoryLarge BlendMid-Cap Growth
IssuerSchwab ETFsiShares
AUM30.89B15.7B
Avg. Return14.60%16.75%
Div. Yield1.41%0.26%
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 Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.

SCHX’s dividend yield is 1.15% higher than that of IWP (1.41% vs. 0.26%). Also, SCHX yielded on average 2.15% less per year over the past decade (14.60% vs. 16.75%). The expense ratio of SCHX is 0.21 percentage points lower than IWP’s (0.03% vs. 0.24%).

Fund Composition

Industry Exposure

SCHX vs. IWP - Industry Exposure

SCHXIWP
Technology25.13%33.88%
Industrials8.65%14.09%
Energy2.72%1.51%
Communication Services11.26%6.32%
Utilities2.37%0.16%
Healthcare13.04%16.79%
Consumer Defensive5.97%2.32%
Real Estate3.13%2.46%
Financial Services13.82%4.52%
Consumer Cyclical11.63%16.09%
Basic Materials2.28%1.86%

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 Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.

IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.

SCHX is 8.75% less exposed to the Technology sector than IWP (25.13% vs 33.88%). SCHX’s exposure to Financial Services and Healthcare stocks is 9.30% higher and 3.75% lower respectively (13.82% vs. 4.52% and 13.04% vs. 16.79%). In total, Utilities, Energy, and Real Estate also make up 4.09% more of the fund’s holdings compared to IWP (8.22% vs. 4.13%).

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%.

IWP - Holdings

IWP HoldingsWeight
IDEXX Laboratories Inc1.3%
DocuSign Inc1.3%
Roku Inc Class A1.29%
Match Group Inc1.06%
Chipotle Mexican Grill Inc1.06%
Pinterest Inc1.05%
Veeva Systems Inc Class A1.04%
Palantir Technologies Inc Ordinary Shares – Class A1.04%
Lululemon Athletica Inc1.01%
DexCom Inc1.0%

IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.

Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.

Risk Analysis

SCHXIWP
Mean Return1.241.27
R-squared99.8387.01
Std. Deviation13.816.05
Alpha-0.14-1.03
Beta1.021.1
Sharpe Ratio1.030.91
Treynor Ratio14.0612.98

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

The iShares Russell Mid-Cap Growth ETF (IWP) has a Beta of 1.1 with a Mean Return of 1.27 and a Sharpe Ratio of 0.91. Its Treynor Ratio is 12.98 while IWP’s R-squared is 87.01. Furthermore, the fund has a Alpha of -1.03 and a Standard Deviation of 16.05.

SCHX’s Mean Return is 0.03 points lower than that of IWP and its R-squared is 12.82 points higher. With a Standard Deviation of 13.8, SCHX is slightly less volatile than IWP. The Alpha and Beta of SCHX are 0.89 points higher and 0.08 points lower than IWP’s Alpha and Beta.

Performance

Annual Returns

SCHX vs. IWP - Annual Returns

YearSCHXIWP
202020.9%35.29%
201931.4%35.14%
2018-4.52%-4.95%
201721.91%24.98%
201611.78%7.15%
20151.02%-0.39%
201413.33%11.68%
201332.54%35.44%
201216.06%15.62%
20111.61%-1.82%
201015.88%26.1%

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 IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.

Portfolio Growth

SCHX vs. IWP - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
SCHX$10,000$36,98714.60%
IWP$10,000$39,80216.75%

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 IWP, the end total would have been $39,802. This equates to a $29,802 profit over 10 years and a compound annual growth rate (CAGR) of 16.75%.

SCHX’s CAGR is 2.15 percentage points lower than that of IWP and as a result, would have yielded $2,815 less on a $10,000 investment. Thus, SCHX performed worse than IWP by 2.15% annually.

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *