SCHB vs. VXF: What’s The Difference?

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

The expense ratio of SCHB is 0.03 percentage points lower than VXF’s (0.03% vs. 0.06%). SCHB also has a higher exposure to the technology sector and a lower standard deviation. Overall, SCHB has provided lower returns than VXF over the past 10 years.

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

Summary

SCHB VXF
Name Schwab U.S. Broad Market ETF Vanguard Extended Market Index Fund ETF Shares
Category Large Blend Mid-Cap Growth
Issuer Schwab ETFs Vanguard
AUM 21.44B 114.53B
Avg. Return 14.43% 15.47%
Div. Yield 1.39% 1.19%
Expense Ratio 0.03% 0.06%

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 Extended Market Index Fund ETF Shares (VXF) is a Mid-Cap Growth fund that is issued by Vanguard. It currently has 114.53B total assets under management and has yielded an average annual return of 15.47% over the past 10 years. The fund has a dividend yield of 1.19% with an expense ratio of 0.06%.

SCHB’s dividend yield is 0.20% higher than that of VXF (1.39% vs. 1.19%). Also, SCHB yielded on average 1.04% less per year over the past decade (14.43% vs. 15.47%). The expense ratio of SCHB is 0.03 percentage points lower than VXF’s (0.03% vs. 0.06%).

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Fund Composition

Industry Exposure

SCHB vs. VXF - Industry Exposure

SCHB VXF
Technology 24.15% 23.61%
Industrials 9.29% 11.31%
Energy 2.78% 2.46%
Communication Services 10.52% 7.29%
Utilities 2.32% 1.65%
Healthcare 13.37% 15.25%
Consumer Defensive 5.76% 3.09%
Real Estate 3.58% 8.16%
Financial Services 13.88% 12.56%
Consumer Cyclical 11.9% 11.35%
Basic Materials 2.45% 3.26%

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 Extended Market Index Fund ETF Shares (VXF) has the most exposure to the Technology sector at 23.61%. This is followed by Healthcare and Financial Services at 15.25% and 12.56% respectively. Energy (2.46%), Consumer Defensive (3.09%), and Basic Materials (3.26%) only make up 8.81% of the fund’s total assets.

VXF’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Industrials, Consumer Cyclical, and Financial Services stocks at 7.29%, 8.16%, 11.31%, 11.35%, and 12.56%.

SCHB is 0.54% more exposed to the Technology sector than VXF (24.15% vs 23.61%). SCHB’s exposure to Financial Services and Healthcare stocks is 1.32% higher and 1.88% lower respectively (13.88% vs. 12.56% and 13.37% vs. 15.25%). In total, Basic Materials, Energy, and Real Estate also make up 5.07% less of the fund’s holdings compared to VXF (8.81% vs. 13.88%).

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%.

VXF - Holdings

VXF Holdings Weight
Square Inc A 1.2%
Zoom Video Communications Inc 1.04%
Uber Technologies Inc 0.93%
Moderna Inc 0.9%
Blackstone Group Inc 0.83%
Snap Inc Class A 0.8%
Twilio Inc A 0.73%
DocuSign Inc 0.68%
CrowdStrike Holdings Inc Class A 0.63%
Marvell Technology Inc 0.6%

VXF’s Top Holdings are Square Inc A, Zoom Video Communications Inc, Uber Technologies Inc, Moderna Inc, and Blackstone Group Inc at 1.2%, 1.04%, 0.93%, 0.9%, and 0.83%.

Snap Inc Class A (0.8%), Twilio Inc A (0.73%), and DocuSign Inc (0.68%) have a slightly smaller but still significant weight. CrowdStrike Holdings Inc Class A and Marvell Technology Inc are also represented in the VXF’s holdings at 0.63% and 0.6%.

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Risk Analysis

SCHB VXF
Mean Return 1.23 1.24
R-squared 99.33 85.73
Std. Deviation 14.12 18.04
Alpha -0.58 -3.26
Beta 1.04 1.23
Sharpe Ratio 1 0.79
Treynor Ratio 13.58 10.92

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

The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Mean Return of 1.24 with a Treynor Ratio of 10.92 and a Sharpe Ratio of 0.79. Its Alpha is -3.26 while VXF’s R-squared is 85.73. Furthermore, the fund has a Standard Deviation of 18.04 and a Beta of 1.23.

SCHB’s Mean Return is 0.01 points lower than that of VXF and its R-squared is 13.60 points higher. With a Standard Deviation of 14.12, SCHB is slightly less volatile than VXF. The Alpha and Beta of SCHB are 2.68 points higher and 0.19 points lower than VXF’s Alpha and Beta.

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Performance

Annual Returns

SCHB vs. VXF - Annual Returns

Year SCHB VXF
2020 20.77% 32.19%
2019 30.94% 28.04%
2018 -5.25% -9.37%
2017 21.18% 18.1%
2016 12.56% 16.16%
2015 0.45% -3.26%
2014 12.67% 7.55%
2013 33.37% 38.37%
2012 16.22% 18.48%
2011 1.4% -3.61%
2010 17.1% 27.55%

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 VXF, returning 38.37% on an annual basis. The poorest year for VXF in the last ten years was 2018, with a yield of -9.37%. Most years the Vanguard Extended Market Index Fund ETF Shares has given investors modest returns, such as in 2016, 2017, and 2012, when gains were 16.16%, 18.1%, and 18.48% respectively.

Portfolio Growth

SCHB vs. VXF - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHB $10,000 $36,354 14.43%
VXF $10,000 $34,598 15.47%

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 VXF, the end total would have been $34,598. This equates to a $24,598 profit over 10 years and a compound annual growth rate (CAGR) of 15.47%.

SCHB’s CAGR is 1.04 percentage points lower than that of VXF and as a result, would have yielded $1,756 more on a $10,000 investment. Thus, SCHB performed worse than VXF by 1.04% annually.


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