The Schwab U.S. Large-Cap ETF (SCHX) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. SCHX is a Schwab ETFs Large Blend fund and VLUE is a iShares Large Value fund. So, what’s the difference between SCHX and VLUE? And which fund is better?
The expense ratio of SCHX is 0.12 percentage points lower than VLUE’s (0.03% vs. 0.15%). SCHX also has a lower exposure to the technology sector and a higher standard deviation. Overall, SCHX has provided higher returns than VLUE over the past ten years.
In this article, we’ll compare SCHX vs. VLUE. We’ll look at performance and fund composition, as well as at their risk metrics and industry exposure. Moreover, I’ll also discuss SCHX’s and VLUE’s portfolio growth, annual returns, and holdings and examine how these affect their overall returns.
|Name||Schwab U.S. Large-Cap ETF||iShares MSCI USA Value Factor ETF|
|Category||Large Blend||Large Value|
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 MSCI USA Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.
SCHX’s dividend yield is 0.48% lower than that of VLUE (1.41% vs. 1.89%). Also, SCHX yielded on average 5.69% more per year over the past decade (14.60% vs. 8.91%). The expense ratio of SCHX is 0.12 percentage points lower than VLUE’s (0.03% vs. 0.15%).
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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 iShares MSCI USA Value Factor ETF (VLUE) has the most exposure to the Technology sector at 26.89%. This is followed by Healthcare and Financial Services at 14.31% and 10.96% respectively. Energy (2.42%), Utilities (2.68%), and Real Estate (3.19%) only make up 8.29% of the fund’s total assets.
VLUE’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Financial Services stocks at 7.22%, 9.14%, 10.39%, 10.66%, and 10.96%.
SCHX is 1.76% less exposed to the Technology sector than VLUE (25.13% vs 26.89%). SCHX’s exposure to Financial Services and Healthcare stocks is 2.86% higher and 1.27% lower respectively (13.82% vs. 10.96% and 13.04% vs. 14.31%). In total, Utilities, Energy, and Real Estate also make up 0.07% less of the fund’s holdings compared to VLUE (8.22% vs. 8.29%).
|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%.
|General Motors Co||3.19%|
|Micron Technology Inc||3.14%|
|Cisco Systems Inc||3.05%|
|International Business Machines Corp||2.76%|
|Ford Motor Co||2.23%|
VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.
International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.
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The Schwab U.S. Large-Cap ETF (SCHX) has a R-squared of 99.83 with a Standard Deviation of 13.8 and a Mean Return of 1.24. Its Sharpe Ratio is 1.03 while SCHX’s Beta is 1.02. Furthermore, the fund has a Treynor Ratio of 14.06 and a Alpha of -0.14.
The iShares MSCI USA Value Factor ETF (VLUE) has a Beta of 0 with a Treynor Ratio of 0 and a Standard Deviation of 0. Its Sharpe Ratio is 0 while VLUE’s R-squared is 0. Furthermore, the fund has a Mean Return of 0 and a Alpha of 0.
SCHX’s Mean Return is 1.24 points higher than that of VLUE and its R-squared is 99.83 points higher. With a Standard Deviation of 13.8, SCHX is slightly more volatile than VLUE. The Alpha and Beta of SCHX are 0.14 points lower and 1.02 points higher than VLUE’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 2019 was the strongest year for VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in SCHX would have resulted in a final balance of $23,664. This is a profit of $13,664 over 7 years and amounts to a compound annual growth rate (CAGR) of 14.60%.
With a $10,000 investment in VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.
SCHX’s CAGR is 5.69 percentage points higher than that of VLUE and as a result, would have yielded $6,417 more on a $10,000 investment. Thus, SCHX outperformed VLUE by 5.69% annually.
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