SCHX vs. SCHD: What’s The Difference?

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

The expense ratio of SCHX is 0.03 percentage points lower than SCHD’s (0.03% vs. 0.06%). SCHX also has a higher exposure to the technology sector and a higher standard deviation. Overall, SCHX has provided lower returns than SCHD over the past ten years.

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

Summary

SCHX SCHD
Name Schwab U.S. Large-Cap ETF Schwab U.S. Dividend Equity ETF
Category Large Blend Large Value
Issuer Schwab ETFs Schwab ETFs
AUM 30.89B 26B
Avg. Return 14.60% 14.80%
Div. Yield 1.41% 2.89%
Expense Ratio 0.03% 0.06%

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. Dividend Equity ETF (SCHD) is a Large Value fund that is issued by Schwab ETFs. It currently has 26B total assets under management and has yielded an average annual return of 14.80% over the past 10 years. The fund has a dividend yield of 2.89% with an expense ratio of 0.06%.

SCHX’s dividend yield is 1.48% lower than that of SCHD (1.41% vs. 2.89%). Also, SCHX yielded on average 0.20% less per year over the past decade (14.60% vs. 14.80%). The expense ratio of SCHX is 0.03 percentage points lower than SCHD’s (0.03% vs. 0.06%).

Fund Composition

Industry Exposure

SCHX vs. SCHD - Industry Exposure

SCHX SCHD
Technology 25.13% 16.26%
Industrials 8.65% 18.05%
Energy 2.72% 1.87%
Communication Services 11.26% 4.96%
Utilities 2.37% 0.0%
Healthcare 13.04% 12.64%
Consumer Defensive 5.97% 14.04%
Real Estate 3.13% 0.0%
Financial Services 13.82% 21.69%
Consumer Cyclical 11.63% 8.36%
Basic Materials 2.28% 2.13%

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. Dividend Equity ETF (SCHD) has the most exposure to the Financial Services sector at 21.69%. This is followed by Industrials and Technology at 18.05% and 16.26% respectively. Utilities (0.0%), Energy (1.87%), and Basic Materials (2.13%) only make up 4.00% of the fund’s total assets.

SCHD’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Healthcare, Consumer Defensive, and Technology stocks at 4.96%, 8.36%, 12.64%, 14.04%, and 16.26%.

SCHX is 8.87% more exposed to the Technology sector than SCHD (25.13% vs 16.26%). SCHX’s exposure to Financial Services and Healthcare stocks is 7.87% lower and 0.40% higher respectively (13.82% vs. 21.69% and 13.04% vs. 12.64%). In total, Utilities, Energy, and Real Estate also make up 6.35% more of the fund’s holdings compared to SCHD (8.22% vs. 1.87%).

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%.

SCHD - Holdings

SCHD Holdings Weight
Merck & Co Inc 4.24%
The Home Depot Inc 4.19%
Texas Instruments Inc 4.16%
Broadcom Inc 4.15%
Amgen Inc 4.11%
PepsiCo Inc 4.09%
BlackRock Inc 4.05%
Pfizer Inc 3.97%
Verizon Communications Inc 3.96%
Cisco Systems Inc 3.96%

SCHD’s Top Holdings are Merck & Co Inc, The Home Depot Inc, Texas Instruments Inc, Broadcom Inc, and Amgen Inc at 4.24%, 4.19%, 4.16%, 4.15%, and 4.11%.

PepsiCo Inc (4.09%), BlackRock Inc (4.05%), and Pfizer Inc (3.97%) have a slightly smaller but still significant weight. Verizon Communications Inc and Cisco Systems Inc are also represented in the SCHD’s holdings at 3.96% and 3.96%.

Risk Analysis

SCHX SCHD
Mean Return 1.24 0
R-squared 99.83 0
Std. Deviation 13.8 0
Alpha -0.14 0
Beta 1.02 0
Sharpe Ratio 1.03 0
Treynor Ratio 14.06 0

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

The Schwab U.S. Dividend Equity ETF (SCHD) has a Sharpe Ratio of 0 with a R-squared of 0 and a Alpha of 0. Its Beta is 0 while SCHD’s Treynor Ratio is 0. Furthermore, the fund has a Standard Deviation of 0 and a Mean Return of 0.

SCHX’s Mean Return is 1.24 points higher than that of SCHD and its R-squared is 99.83 points higher. With a Standard Deviation of 13.8, SCHX is slightly more volatile than SCHD. The Alpha and Beta of SCHX are 0.14 points lower and 1.02 points higher than SCHD’s Alpha and Beta.

Performance

Annual Returns

SCHX vs. SCHD - Annual Returns

Year SCHX SCHD
2020 20.9% 15.11%
2019 31.4% 27.28%
2018 -4.52% -5.46%
2017 21.91% 20.88%
2016 11.78% 16.25%
2015 1.02% -0.21%
2014 13.33% 11.66%
2013 32.54% 32.9%
2012 16.06% 11.4%
2011 1.61% 0.0%
2010 15.88% 0.0%

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 SCHD, returning 32.9% on an annual basis. The poorest year for SCHD in the last ten years was 2018, with a yield of -5.46%. Most years the Schwab U.S. Dividend Equity ETF has given investors modest returns, such as in 2012, 2014, and 2020, when gains were 11.4%, 11.66%, and 15.11% respectively.

Portfolio Growth

SCHX vs. SCHD - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHX $10,000 $31,364 14.60%
SCHD $10,000 $28,823 14.80%

A $10,000 investment in SCHX would have resulted in a final balance of $31,364. This is a profit of $21,364 over 8 years and amounts to a compound annual growth rate (CAGR) of 14.60%.

With a $10,000 investment in SCHD, the end total would have been $28,823. This equates to a $18,823 profit over 8 years and a compound annual growth rate (CAGR) of 14.80%.

SCHX’s CAGR is 0.20 percentage points lower than that of SCHD and as a result, would have yielded $2,541 more on a $10,000 investment. Thus, SCHX performed worse than SCHD by 0.20% annually.


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