The SPDR S&P 500 ETF Trust (SPY) and the Schwab U.S. TIPS ETF (SCHP) are both among the Top 100 ETFs. SPY is a SPDR State Street Global Advisors Large Blend fund and SCHP is a Schwab ETFs Inflation-Protected Bond fund. So, what’s the difference between SPY and SCHP? And which fund is better?

The expense ratio of SPY is 0.04 percentage points higher than SCHP’s (0.09% vs. 0.05%). SPY also has a high exposure to the technology sector while SCHP is mostly comprised of AAA bonds. Overall, SPY has provided higher returns than SCHP over the past ten years.

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

Summary

SPYSCHP
NameSPDR S&P 500 ETF TrustSchwab U.S. TIPS ETF
CategoryLarge BlendInflation-Protected Bond
IssuerSPDR State Street Global AdvisorsSchwab ETFs
AUM374.03B18.41B
Avg. Return14.41%3.92%
Div. Yield1.3%1.97%
Expense Ratio0.09%0.05%

The SPDR S&P 500 ETF Trust (SPY) is a Large Blend fund that is issued by SPDR State Street Global Advisors. It currently has 374.03B total assets under management and has yielded an average annual return of 14.41% over the past 10 years. The fund has a dividend yield of 1.3% with an expense ratio of 0.09%.

The Schwab U.S. TIPS ETF (SCHP) is a Inflation-Protected Bond fund that is issued by Schwab ETFs. It currently has 18.41B total assets under management and has yielded an average annual return of 3.92% over the past 10 years. The fund has a dividend yield of 1.97% with an expense ratio of 0.05%.

SPY’s dividend yield is 0.67% lower than that of SCHP (1.3% vs. 1.97%). Also, SPY yielded on average 10.49% more per year over the past decade (14.41% vs. 3.92%). The expense ratio of SPY is 0.04 percentage points higher than SCHP’s (0.09% vs. 0.05%).

Fund Composition

Holdings

SPY - Holdings

SPY HoldingsWeight
Apple Inc5.9%
Microsoft Corp5.6%
Amazon.com Inc4.05%
Facebook Inc A2.29%
Alphabet Inc A2.02%
Alphabet Inc Class C1.96%
Berkshire Hathaway Inc Class B1.45%
Tesla Inc1.44%
NVIDIA Corp1.37%
JPMorgan Chase & Co1.29%

SPY’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 5.9%, 5.6%, 4.05%, 2.29%, and 2.02%.

Alphabet Inc Class C (1.96%), Berkshire Hathaway Inc Class B (1.45%), and Tesla Inc (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SPY’s holdings at 1.37% and 1.29%.

SCHP - Holdings

SCHP Bond SectorsWeight
AAA100.0%
Others0.0%
Below B0.0%
B0.0%
BB0.0%
BBB0.0%
A0.0%
AA0.0%
US Government0.0%

SCHP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.

Performance

Annual Returns

SPY vs. SCHP - Annual Returns

YearSPYSCHP
202018.25%10.94%
201931.29%8.36%
2018-4.45%-1.31%
201721.69%2.95%
201611.8%4.6%
20151.34%-1.5%
201413.53%3.56%
201332.21%-8.66%
201215.84%6.83%
20112.06%13.38%
201014.93%0.0%

SPY had its best year in 2013 with an annual return of 32.21%. SPY’s worst year over the past decade yielded -4.45% and occurred in 2018. In most years the SPDR S&P 500 ETF Trust provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.53%, 14.93%, and 15.84% respectively.

The year 2011 was the strongest year for SCHP, returning 13.38% on an annual basis. The poorest year for SCHP in the last ten years was 2013, with a yield of -8.66%. Most years the Schwab U.S. TIPS ETF has given investors modest returns, such as in 2017, 2014, and 2016, when gains were 2.95%, 3.56%, and 4.6% respectively.

Portfolio Growth

SPY vs. SCHP - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
SPY$10,000$36,29314.41%
SCHP$10,000$14,4183.92%

A $10,000 investment in SPY would have resulted in a final balance of $36,293. This is a profit of $26,293 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.41%.

With a $10,000 investment in SCHP, the end total would have been $14,418. This equates to a $4,418 profit over 10 years and a compound annual growth rate (CAGR) of 3.92%.

SPY’s CAGR is 10.49 percentage points higher than that of SCHP and as a result, would have yielded $21,875 more on a $10,000 investment. Thus, SPY outperformed SCHP by 10.49% annually.

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