The Schwab U.S. Large-Cap ETF (SCHX) and the Schwab U.S. Small-Cap ETF (SCHA) are both among the Top 100 ETFs. SCHX is a Schwab ETFs Large Blend fund and SCHA is a Schwab ETFs Small Blend fund. So, what’s the difference between SCHX and SCHA? And which fund is better?
The expense ratio of SCHX is 0.01 percentage points lower than SCHA’s (0.03% vs. 0.04%). SCHX also has a higher exposure to the technology sector and a lower standard deviation. Overall, SCHX has provided higher returns than SCHA over the past ten years.
In this article, we’ll compare SCHX vs. SCHA. We’ll look at industry exposure and annual returns, as well as at their risk metrics and performance. Moreover, I’ll also discuss SCHX’s and SCHA’s holdings, fund composition, and portfolio growth and examine how these affect their overall returns.
|Name||Schwab U.S. Large-Cap ETF||Schwab U.S. Small-Cap ETF|
|Category||Large Blend||Small Blend|
|Issuer||Schwab ETFs||Schwab ETFs|
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 Schwab U.S. Small-Cap ETF (SCHA) is a Small Blend fund that is issued by Schwab ETFs. It currently has 16.51B total assets under management and has yielded an average annual return of 12.62% over the past 10 years. The fund has a dividend yield of 0.98% with an expense ratio of 0.04%.
SCHX’s dividend yield is 0.43% higher than that of SCHA (1.41% vs. 0.98%). Also, SCHX yielded on average 1.98% more per year over the past decade (14.60% vs. 12.62%). The expense ratio of SCHX is 0.01 percentage points lower than SCHA’s (0.03% vs. 0.04%).
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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 Schwab U.S. Small-Cap ETF (SCHA) has the most exposure to the Healthcare sector at 16.5%. This is followed by Industrials and Technology at 15.37% and 14.91% respectively. Energy (3.35%), Communication Services (3.5%), and Consumer Defensive (3.75%) only make up 10.60% of the fund’s total assets.
SCHA’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Technology stocks at 3.98%, 7.83%, 14.48%, 14.49%, and 14.91%.
SCHX is 10.22% more exposed to the Technology sector than SCHA (25.13% vs 14.91%). SCHX’s exposure to Financial Services and Healthcare stocks is 0.67% lower and 3.46% lower respectively (13.82% vs. 14.49% and 13.04% vs. 16.5%). In total, Utilities, Energy, and Real Estate also make up 4.79% less of the fund’s holdings compared to SCHA (8.22% vs. 13.01%).
|Facebook Inc A||2.08%|
|Alphabet Inc A||1.84%|
|Alphabet Inc Class C||1.78%|
|Berkshire Hathaway Inc Class B||1.32%|
|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%.
|AMC Entertainment Holdings Inc Class A||0.67%|
|Caesars Entertainment Inc||0.51%|
|Plug Power Inc||0.41%|
|10x Genomics Inc Ordinary Shares – Class A||0.34%|
|GameStop Corp Class A||0.28%|
|Penn National Gaming Inc||0.27%|
|Axon Enterprise Inc||0.27%|
SCHA’s Top Holdings are AMC Entertainment Holdings Inc Class A, Caesars Entertainment Inc, Cloudflare Inc, NovoCure Ltd, and Plug Power Inc at 0.67%, 0.51%, 0.48%, 0.45%, and 0.41%.
10x Genomics Inc Ordinary Shares – Class A (0.34%), GameStop Corp Class A (0.28%), and RH (0.27%) have a slightly smaller but still significant weight. Penn National Gaming Inc and Axon Enterprise Inc are also represented in the SCHA’s holdings at 0.27% and 0.27%.
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The Schwab U.S. Large-Cap ETF (SCHX) has a Treynor Ratio of 14.06 with a Sharpe Ratio of 1.03 and a Alpha of -0.14. Its Mean Return is 1.24 while SCHX’s R-squared is 99.83. Furthermore, the fund has a Standard Deviation of 13.8 and a Beta of 1.02.
The Schwab U.S. Small-Cap ETF (SCHA) has a Standard Deviation of 18.68 with a R-squared of 82.26 and a Treynor Ratio of 9.62. Its Beta is 1.25 while SCHA’s Alpha is -4.65. Furthermore, the fund has a Sharpe Ratio of 0.7 and a Mean Return of 1.14.
SCHX’s Mean Return is 0.10 points higher than that of SCHA and its R-squared is 17.57 points higher. With a Standard Deviation of 13.8, SCHX is slightly less volatile than SCHA. The Alpha and Beta of SCHX are 4.51 points higher and 0.23 points lower than SCHA’s Alpha and Beta.
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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 SCHA, returning 39.59% on an annual basis. The poorest year for SCHA in the last ten years was 2018, with a yield of -11.75%. Most years the Schwab U.S. Small-Cap ETF has given investors modest returns, such as in 2017, 2012, and 2020, when gains were 15.04%, 18.24%, and 19.35% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 SCHA, the end total would have been $30,035. This equates to a $20,035 profit over 10 years and a compound annual growth rate (CAGR) of 12.62%.
SCHX’s CAGR is 1.98 percentage points higher than that of SCHA and as a result, would have yielded $6,952 more on a $10,000 investment. Thus, SCHX outperformed SCHA by 1.98% annually.
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