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SCHX vs. SCHB: What’s The Difference?

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

SCHX and SCHB have the same expense ratio: 0.03%. SCHX also has a higher exposure to the technology sector and a lower standard deviation. Overall, SCHX has provided higher returns than SCHB over the past ten years.

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

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Summary

SCHXSCHB
NameSchwab U.S. Large-Cap ETFSchwab U.S. Broad Market ETF
CategoryLarge BlendLarge Blend
IssuerSchwab ETFsSchwab ETFs
AUM30.89B21.44B
Avg. Return14.60%14.43%
Div. Yield1.41%1.39%
Expense Ratio0.03%0.03%

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. Broad Market ETF (SCHB) is a Large Blend fund that is issued by Schwab ETFs. It currently has 21.44B total assets under management and has yielded an average annual return of 14.43% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.03%.

SCHX’s dividend yield is 0.02% higher than that of SCHB (1.41% vs. 1.39%). Also, SCHX yielded on average 0.17% more per year over the past decade (14.60% vs. 14.43%). SCHX and SCHB have the same expense ratio: 0.03%.

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Fund Composition

Industry Exposure

SCHX vs. SCHB - Industry Exposure

SCHXSCHB
Technology25.13%24.15%
Industrials8.65%9.29%
Energy2.72%2.78%
Communication Services11.26%10.52%
Utilities2.37%2.32%
Healthcare13.04%13.37%
Consumer Defensive5.97%5.76%
Real Estate3.13%3.58%
Financial Services13.82%13.88%
Consumer Cyclical11.63%11.9%
Basic Materials2.28%2.45%

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. Broad Market ETF (SCHB) has the most exposure to the Technology sector at 24.15%. This is followed by Financial Services and Healthcare at 13.88% and 13.37% respectively. Basic Materials (2.45%), Energy (2.78%), and Real Estate (3.58%) only make up 8.81% of the fund’s total assets.

SCHB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.76%, 9.29%, 10.52%, 11.9%, and 13.37%.

SCHX is 0.98% more exposed to the Technology sector than SCHB (25.13% vs 24.15%). SCHX’s exposure to Financial Services and Healthcare stocks is 0.06% lower and 0.33% lower respectively (13.82% vs. 13.88% and 13.04% vs. 13.37%). In total, Utilities, Energy, and Real Estate also make up 0.46% less of the fund’s holdings compared to SCHB (8.22% vs. 8.68%).

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%.

SCHB - Holdings

SCHB HoldingsWeight
Apple Inc4.86%
Microsoft Corp4.61%
Amazon.com Inc3.33%
Facebook Inc A1.88%
Alphabet Inc A1.66%
Alphabet Inc Class C1.61%
Berkshire Hathaway Inc Class B1.19%
Tesla Inc1.18%
NVIDIA Corp1.13%
JPMorgan Chase & Co1.06%

SCHB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 4.86%, 4.61%, 3.33%, 1.88%, and 1.66%.

Alphabet Inc Class C (1.61%), Berkshire Hathaway Inc Class B (1.19%), and Tesla Inc (1.18%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHB’s holdings at 1.13% and 1.06%.

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Risk Analysis

SCHXSCHB
Mean Return1.241.23
R-squared99.8399.33
Std. Deviation13.814.12
Alpha-0.14-0.58
Beta1.021.04
Sharpe Ratio1.031
Treynor Ratio14.0613.58

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

The Schwab U.S. Broad Market ETF (SCHB) has a R-squared of 99.33 with a Sharpe Ratio of 1 and a Beta of 1.04. Its Treynor Ratio is 13.58 while SCHB’s Alpha is -0.58. Furthermore, the fund has a Standard Deviation of 14.12 and a Mean Return of 1.23.

SCHX’s Mean Return is 0.01 points higher than that of SCHB and its R-squared is 0.50 points higher. With a Standard Deviation of 13.8, SCHX is slightly less volatile than SCHB. The Alpha and Beta of SCHX are 0.44 points higher and 0.02 points lower than SCHB’s Alpha and Beta.

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Performance

Annual Returns

SCHX vs. SCHB - Annual Returns

YearSCHXSCHB
202020.9%20.77%
201931.4%30.94%
2018-4.52%-5.25%
201721.91%21.18%
201611.78%12.56%
20151.02%0.45%
201413.33%12.67%
201332.54%33.37%
201216.06%16.22%
20111.61%1.4%
201015.88%17.1%

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 SCHB, returning 33.37% on an annual basis. The poorest year for SCHB in the last ten years was 2018, with a yield of -5.25%. Most years the Schwab U.S. Broad Market ETF has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 12.67%, 16.22%, and 17.1% respectively.

Portfolio Growth

SCHX vs. SCHB - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
SCHX$10,000$36,98714.60%
SCHB$10,000$36,35414.43%

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 SCHB, the end total would have been $36,354. This equates to a $26,354 profit over 10 years and a compound annual growth rate (CAGR) of 14.43%.

SCHX’s CAGR is 0.17 percentage points higher than that of SCHB and as a result, would have yielded $633 more on a $10,000 investment. Thus, SCHX outperformed SCHB by 0.17% annually.


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