SCHB vs. VOE: What’s The Difference?

The Schwab U.S. Broad Market ETF (SCHB) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. SCHB is a Schwab ETFs Large Blend fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between SCHB and VOE? And which fund is better?

The expense ratio of SCHB is 0.04 percentage points lower than VOE’s (0.03% vs. 0.07%). SCHB also has a higher exposure to the technology sector and a lower standard deviation. Overall, SCHB has provided higher returns than VOE over the past 10 years.

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

Summary

SCHB VOE
Name Schwab U.S. Broad Market ETF Vanguard Mid-Cap Value Index Fund ETF Shares
Category Large Blend Mid-Cap Value
Issuer Schwab ETFs Vanguard
AUM 21.44B 26.78B
Avg. Return 14.43% 12.52%
Div. Yield 1.39% 1.87%
Expense Ratio 0.03% 0.07%

The Schwab U.S. Broad Market ETF (SCHB) is a Large Blend fund that is issued by Schwab ETFs. It currently has 21.44B total assets under management and has yielded an average annual return of 14.43% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.03%.

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.

SCHB’s dividend yield is 0.48% lower than that of VOE (1.39% vs. 1.87%). Also, SCHB yielded on average 1.91% more per year over the past decade (14.43% vs. 12.52%). The expense ratio of SCHB is 0.04 percentage points lower than VOE’s (0.03% vs. 0.07%).

Fund Composition

Industry Exposure

SCHB vs. VOE - Industry Exposure

SCHB VOE
Technology 24.15% 9.85%
Industrials 9.29% 9.4%
Energy 2.78% 5.69%
Communication Services 10.52% 5.27%
Utilities 2.32% 10.93%
Healthcare 13.37% 7.04%
Consumer Defensive 5.76% 4.85%
Real Estate 3.58% 11.48%
Financial Services 13.88% 18.26%
Consumer Cyclical 11.9% 11.8%
Basic Materials 2.45% 5.44%

The Schwab U.S. Broad Market ETF (SCHB) has the most exposure to the Technology sector at 24.15%. This is followed by Financial Services and Healthcare at 13.88% and 13.37% respectively. Basic Materials (2.45%), Energy (2.78%), and Real Estate (3.58%) only make up 8.81% of the fund’s total assets.

SCHB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.76%, 9.29%, 10.52%, 11.9%, and 13.37%.

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.

VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.

SCHB is 14.30% more exposed to the Technology sector than VOE (24.15% vs 9.85%). SCHB’s exposure to Financial Services and Healthcare stocks is 4.38% lower and 6.33% higher respectively (13.88% vs. 18.26% and 13.37% vs. 7.04%). In total, Basic Materials, Energy, and Real Estate also make up 13.80% less of the fund’s holdings compared to VOE (8.81% vs. 22.61%).

Holdings

SCHB - Holdings

SCHB Holdings Weight
Apple Inc 4.86%
Microsoft Corp 4.61%
Amazon.com Inc 3.33%
Facebook Inc A 1.88%
Alphabet Inc A 1.66%
Alphabet Inc Class C 1.61%
Berkshire Hathaway Inc Class B 1.19%
Tesla Inc 1.18%
NVIDIA Corp 1.13%
JPMorgan Chase & Co 1.06%

SCHB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 4.86%, 4.61%, 3.33%, 1.88%, and 1.66%.

Alphabet Inc Class C (1.61%), Berkshire Hathaway Inc Class B (1.19%), and Tesla Inc (1.18%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHB’s holdings at 1.13% and 1.06%.

VOE - Holdings

VOE Holdings Weight
Carrier Global Corp Ordinary Shares 1.28%
International Flavors & Fragrances Inc 1.13%
Motorola Solutions Inc 1.12%
Discover Financial Services 1.09%
Welltower Inc 1.05%
Corteva Inc 0.99%
Valero Energy Corp 0.97%
Corning Inc 0.95%
Willis Towers Watson PLC 0.9%
D.R. Horton Inc 0.89%

VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.

Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.

Risk Analysis

SCHB VOE
Mean Return 1.23 1.05
R-squared 99.33 88.76
Std. Deviation 14.12 15.98
Alpha -0.58 -3.77
Beta 1.04 1.11
Sharpe Ratio 1 0.75
Treynor Ratio 13.58 10.19

The Schwab U.S. Broad Market ETF (SCHB) has a Sharpe Ratio of 1 with a Beta of 1.04 and a Treynor Ratio of 13.58. Its Standard Deviation is 14.12 while SCHB’s R-squared is 99.33. Furthermore, the fund has a Mean Return of 1.23 and a Alpha of -0.58.

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Alpha of -3.77 with a Mean Return of 1.05 and a R-squared of 88.76. Its Treynor Ratio is 10.19 while VOE’s Standard Deviation is 15.98. Furthermore, the fund has a Sharpe Ratio of 0.75 and a Beta of 1.11.

SCHB’s Mean Return is 0.18 points higher than that of VOE and its R-squared is 10.57 points higher. With a Standard Deviation of 14.12, SCHB is slightly less volatile than VOE. The Alpha and Beta of SCHB are 3.19 points higher and 0.07 points lower than VOE’s Alpha and Beta.

Performance

Annual Returns

SCHB vs. VOE - Annual Returns

Year SCHB VOE
2020 20.77% 2.5%
2019 30.94% 27.98%
2018 -5.25% -12.41%
2017 21.18% 17.05%
2016 12.56% 15.26%
2015 0.45% -1.8%
2014 12.67% 13.98%
2013 33.37% 37.65%
2012 16.22% 16.04%
2011 1.4% -0.32%
2010 17.1% 21.83%

SCHB had its best year in 2013 with an annual return of 33.37%. SCHB’s worst year over the past decade yielded -5.25% and occurred in 2018. In most years the Schwab U.S. Broad Market ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 12.67%, 16.22%, and 17.1% respectively.

The year 2013 was the strongest year for VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.

Portfolio Growth

SCHB vs. VOE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHB $10,000 $36,354 14.43%
VOE $10,000 $27,625 12.52%

A $10,000 investment in SCHB would have resulted in a final balance of $36,354. This is a profit of $26,354 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.43%.

With a $10,000 investment in VOE, the end total would have been $27,625. This equates to a $17,625 profit over 10 years and a compound annual growth rate (CAGR) of 12.52%.

SCHB’s CAGR is 1.91 percentage points higher than that of VOE and as a result, would have yielded $8,729 more on a $10,000 investment. Thus, SCHB outperformed VOE by 1.91% annually.


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