The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the Schwab U.S. Large-Cap Growth ETF (SCHG) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and SCHG is a Schwab ETFs Large Growth fund. So, what’s the difference between BSV and SCHG? And which fund is better?
The expense ratio of BSV is 0.01 percentage points higher than SCHG’s (0.05% vs. 0.04%). BSV is mostly comprised of AAA bonds while SCHG has a high exposure to the technology sector. Overall, BSV has provided lower returns than SCHG over the past ten years.
In this article, we’ll compare BSV vs. SCHG. We’ll look at industry exposure and annual returns, as well as at their risk metrics and performance. Moreover, I’ll also discuss BSV’s and SCHG’s fund composition, portfolio growth, and holdings and examine how these affect their overall returns.
Summary
| BSV | SCHG | |
| Name | Vanguard Short-Term Bond Index Fund ETF Shares | Schwab U.S. Large-Cap Growth ETF |
| Category | Short-Term Bond | Large Growth |
| Issuer | Vanguard | Schwab ETFs |
| AUM | 67.71B | 15.16B |
| Avg. Return | 2.27% | 17.81% |
| Div. Yield | 1.48% | 0.43% |
| Expense Ratio | 0.05% | 0.04% |
The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) is a Short-Term Bond fund that is issued by Vanguard. It currently has 67.71B total assets under management and has yielded an average annual return of 2.27% over the past 10 years. The fund has a dividend yield of 1.48% with an expense ratio of 0.05%.
The Schwab U.S. Large-Cap Growth ETF (SCHG) is a Large Growth fund that is issued by Schwab ETFs. It currently has 15.16B total assets under management and has yielded an average annual return of 17.81% over the past 10 years. The fund has a dividend yield of 0.43% with an expense ratio of 0.04%.
BSV’s dividend yield is 1.05% higher than that of SCHG (1.48% vs. 0.43%). Also, BSV yielded on average 15.54% less per year over the past decade (2.27% vs. 17.81%). The expense ratio of BSV is 0.01 percentage points higher than SCHG’s (0.05% vs. 0.04%).
Fund Composition
Holdings
| BSV Bond Sectors | Weight |
| AAA | 71.65% |
| BBB | 13.08% |
| A | 11.95% |
| AA | 3.28% |
| Others | 0.03% |
| Below B | 0.01% |
| B | 0.0% |
| BB | 0.0% |
| US Government | 0.0% |
BSV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 71.65%, 13.08%, 11.95%, 3.28%, and 0.03%. The fund is less weighted towards Below B (0.01%), B (0.0%), and BB (0.0%) rated bonds.
| SCHG Holdings | Weight |
| Apple Inc | 11.49% |
| Microsoft Corp | 10.91% |
| Amazon.com Inc | 7.89% |
| Facebook Inc A | 4.45% |
| Alphabet Inc A | 3.93% |
| Alphabet Inc Class C | 3.82% |
| Tesla Inc | 2.8% |
| NVIDIA Corp | 2.67% |
| Visa Inc Class A | 2.12% |
| UnitedHealth Group Inc | 2.02% |
SCHG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 11.49%, 10.91%, 7.89%, 4.45%, and 3.93%.
Alphabet Inc Class C (3.82%), Tesla Inc (2.8%), and NVIDIA Corp (2.67%) have a slightly smaller but still significant weight. Visa Inc Class A and UnitedHealth Group Inc are also represented in the SCHG’s holdings at 2.12% and 2.02%.
Risk Analysis
| BSV | SCHG | |
| Mean Return | 0.16 | 1.46 |
| R-squared | 78.38 | 92.92 |
| Std. Deviation | 1.33 | 14.78 |
| Alpha | 0.21 | 1.97 |
| Beta | 0.38 | 1.05 |
| Sharpe Ratio | 0.98 | 1.14 |
| Treynor Ratio | 3.33 | 16.3 |
The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Standard Deviation of 1.33 with a Sharpe Ratio of 0.98 and a R-squared of 78.38. Its Treynor Ratio is 3.33 while BSV’s Mean Return is 0.16. Furthermore, the fund has a Alpha of 0.21 and a Beta of 0.38.
The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Treynor Ratio of 16.3 with a Mean Return of 1.46 and a R-squared of 92.92. Its Standard Deviation is 14.78 while SCHG’s Sharpe Ratio is 1.14. Furthermore, the fund has a Alpha of 1.97 and a Beta of 1.05.
BSV’s Mean Return is 1.30 points lower than that of SCHG and its R-squared is 14.54 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than SCHG. The Alpha and Beta of BSV are 1.76 points lower and 0.67 points lower than SCHG’s Alpha and Beta.
Performance
Annual Returns
| Year | BSV | SCHG |
| 2020 | 4.67% | 39.13% |
| 2019 | 4.92% | 36.21% |
| 2018 | 1.34% | -1.35% |
| 2017 | 1.2% | 28.04% |
| 2016 | 1.42% | 6.76% |
| 2015 | 0.92% | 3.26% |
| 2014 | 1.32% | 15.74% |
| 2013 | 0.17% | 33.96% |
| 2012 | 1.98% | 17.02% |
| 2011 | 3.04% | -0.67% |
| 2010 | 4.0% | 16.83% |
BSV had its best year in 2019 with an annual return of 4.92%. BSV’s worst year over the past decade yielded 0.17% and occurred in 2013. In most years the Vanguard Short-Term Bond Index Fund ETF Shares provided moderate returns such as in 2018, 2016, and 2012 where annual returns amounted to 1.34%, 1.42%, and 1.98% respectively.
The year 2020 was the strongest year for SCHG, returning 39.13% on an annual basis. The poorest year for SCHG in the last ten years was 2018, with a yield of -1.35%. Most years the Schwab U.S. Large-Cap Growth ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 15.74%, 16.83%, and 17.02% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| BSV | $10,000 | $12,294 | 2.27% |
| SCHG | $10,000 | $47,556 | 17.81% |
A $10,000 investment in BSV would have resulted in a final balance of $12,294. This is a profit of $2,294 over 10 years and amounts to a compound annual growth rate (CAGR) of 2.27%.
With a $10,000 investment in SCHG, the end total would have been $47,556. This equates to a $37,556 profit over 10 years and a compound annual growth rate (CAGR) of 17.81%.
BSV’s CAGR is 15.54 percentage points lower than that of SCHG and as a result, would have yielded $35,262 less on a $10,000 investment. Thus, BSV performed worse than SCHG by 15.54% annually.
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