The Schwab U.S. Large-Cap ETF (SCHX) and the SPDR S&P Dividend ETF (SDY) are both among the Top 100 ETFs. SCHX is a Schwab ETFs Large Blend fund and SDY is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between SCHX and SDY? And which fund is better?
The expense ratio of SCHX is 0.32 percentage points lower than SDY’s (0.03% vs. 0.35%). SCHX also has a higher exposure to the technology sector and a higher standard deviation. Overall, SCHX has provided higher returns than SDY over the past ten years.
In this article, we’ll compare SCHX vs. SDY. We’ll look at portfolio growth and industry exposure, as well as at their performance and annual returns. Moreover, I’ll also discuss SCHX’s and SDY’s risk metrics, holdings, and fund composition and examine how these affect their overall returns.
|Name||Schwab U.S. Large-Cap ETF||SPDR S&P Dividend ETF|
|Category||Large Blend||Large Value|
|Issuer||Schwab ETFs||SPDR State Street Global Advisors|
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 SPDR S&P Dividend ETF (SDY) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 19.67B total assets under management and has yielded an average annual return of 12.44% over the past 10 years. The fund has a dividend yield of 2.65% with an expense ratio of 0.35%.
SCHX’s dividend yield is 1.24% lower than that of SDY (1.41% vs. 2.65%). Also, SCHX yielded on average 2.16% more per year over the past decade (14.60% vs. 12.44%). The expense ratio of SCHX is 0.32 percentage points lower than SDY’s (0.03% vs. 0.35%).
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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 SPDR S&P Dividend ETF (SDY) has the most exposure to the Financial Services sector at 16.32%. This is followed by Industrials and Consumer Defensive at 15.89% and 14.01% respectively. Communication Services (4.64%), Energy (5.95%), and Basic Materials (6.45%) only make up 17.04% of the fund’s total assets.
SDY’s mid-section with moderate exposure is comprised of Real Estate, Healthcare, Consumer Cyclical, Utilities, and Consumer Defensive stocks at 6.57%, 7.35%, 8.68%, 12.14%, and 14.01%.
SCHX is 23.13% more exposed to the Technology sector than SDY (25.13% vs 2.0%). SCHX’s exposure to Financial Services and Healthcare stocks is 2.50% lower and 5.69% higher respectively (13.82% vs. 16.32% and 13.04% vs. 7.35%). In total, Utilities, Energy, and Real Estate also make up 16.44% less of the fund’s holdings compared to SDY (8.22% vs. 24.66%).
|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%.
|Exxon Mobil Corp||2.81%|
|South Jersey Industries Inc||2.22%|
|International Business Machines Corp||2.0%|
|National Retail Properties Inc||1.86%|
|Federal Realty Investment Trust||1.77%|
|Realty Income Corp||1.7%|
|Old Republic International Corp||1.65%|
SDY’s Top Holdings are Exxon Mobil Corp, AT&T Inc, South Jersey Industries Inc, Chevron Corp, and International Business Machines Corp at 2.81%, 2.5%, 2.22%, 2.02%, and 2.0%.
AbbVie Inc (1.93%), National Retail Properties Inc (1.86%), and Federal Realty Investment Trust (1.77%) have a slightly smaller but still significant weight. Realty Income Corp and Old Republic International Corp are also represented in the SDY’s holdings at 1.7% and 1.65%.
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The Schwab U.S. Large-Cap ETF (SCHX) has a Standard Deviation of 13.8 with a Alpha of -0.14 and a R-squared of 99.83. Its Beta is 1.02 while SCHX’s Mean Return is 1.24. Furthermore, the fund has a Treynor Ratio of 14.06 and a Sharpe Ratio of 1.03.
The SPDR S&P Dividend ETF (SDY) has a Beta of 0.87 with a Sharpe Ratio of 0.95 and a Mean Return of 1.07. Its R-squared is 83.62 while SDY’s Standard Deviation is 12.9. Furthermore, the fund has a Treynor Ratio of 13.94 and a Alpha of -0.1.
SCHX’s Mean Return is 0.17 points higher than that of SDY and its R-squared is 16.21 points higher. With a Standard Deviation of 13.8, SCHX is slightly more volatile than SDY. The Alpha and Beta of SCHX are 0.04 points lower and 0.15 points higher than SDY’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 SDY, returning 30.09% on an annual basis. The poorest year for SDY in the last ten years was 2018, with a yield of -2.73%. Most years the SPDR S&P Dividend ETF has given investors modest returns, such as in 2012, 2014, and 2017, when gains were 11.51%, 13.8%, and 15.84% 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 SDY, the end total would have been $29,900. This equates to a $19,900 profit over 10 years and a compound annual growth rate (CAGR) of 12.44%.
SCHX’s CAGR is 2.16 percentage points higher than that of SDY and as a result, would have yielded $7,087 more on a $10,000 investment. Thus, SCHX outperformed SDY by 2.16% annually.
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