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SCHD vs. VOE: What’s The Difference?

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

The expense ratio of SCHD is 0.01 percentage points lower than VOE’s (0.06% vs. 0.07%). SCHD also has a higher exposure to the financial services sector and a lower standard deviation. Overall, SCHD has provided higher returns than VOE over the past 8 years.

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

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Summary

SCHDVOE
NameSchwab U.S. Dividend Equity ETFVanguard Mid-Cap Value Index Fund ETF Shares
CategoryLarge ValueMid-Cap Value
IssuerSchwab ETFsVanguard
AUM26B26.78B
Avg. Return14.80%12.52%
Div. Yield2.89%1.87%
Expense Ratio0.06%0.07%

The Schwab U.S. Dividend Equity ETF (SCHD) is a Large Value fund that is issued by Schwab ETFs. It currently has 26B total assets under management and has yielded an average annual return of 14.80% over the past 10 years. The fund has a dividend yield of 2.89% with an expense ratio of 0.06%.

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%.

SCHD’s dividend yield is 1.02% higher than that of VOE (2.89% vs. 1.87%). Also, SCHD yielded on average 2.28% more per year over the past decade (14.80% vs. 12.52%). The expense ratio of SCHD is 0.01 percentage points lower than VOE’s (0.06% vs. 0.07%).

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Fund Composition

Industry Exposure

SCHD vs. VOE - Industry Exposure

SCHDVOE
Technology16.26%9.85%
Industrials18.05%9.4%
Energy1.87%5.69%
Communication Services4.96%5.27%
Utilities0.0%10.93%
Healthcare12.64%7.04%
Consumer Defensive14.04%4.85%
Real Estate0.0%11.48%
Financial Services21.69%18.26%
Consumer Cyclical8.36%11.8%
Basic Materials2.13%5.44%

The Schwab U.S. Dividend Equity ETF (SCHD) has the most exposure to the Financial Services sector at 21.69%. This is followed by Industrials and Technology at 18.05% and 16.26% respectively. Utilities (0.0%), Energy (1.87%), and Basic Materials (2.13%) only make up 4.00% of the fund’s total assets.

SCHD’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Healthcare, Consumer Defensive, and Technology stocks at 4.96%, 8.36%, 12.64%, 14.04%, and 16.26%.

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%.

SCHD is 3.43% more exposed to the Financial Services sector than VOE (21.69% vs 18.26%). SCHD’s exposure to Industrials and Technology stocks is 8.65% higher and 6.41% higher respectively (18.05% vs. 9.4% and 16.26% vs. 9.85%). In total, Utilities, Energy, and Basic Materials also make up 18.06% less of the fund’s holdings compared to VOE (4.00% vs. 22.06%).

Holdings

SCHD - Holdings

SCHD HoldingsWeight
Merck & Co Inc4.24%
The Home Depot Inc4.19%
Texas Instruments Inc4.16%
Broadcom Inc4.15%
Amgen Inc4.11%
PepsiCo Inc4.09%
BlackRock Inc4.05%
Pfizer Inc3.97%
Verizon Communications Inc3.96%
Cisco Systems Inc3.96%

SCHD’s Top Holdings are Merck & Co Inc, The Home Depot Inc, Texas Instruments Inc, Broadcom Inc, and Amgen Inc at 4.24%, 4.19%, 4.16%, 4.15%, and 4.11%.

PepsiCo Inc (4.09%), BlackRock Inc (4.05%), and Pfizer Inc (3.97%) have a slightly smaller but still significant weight. Verizon Communications Inc and Cisco Systems Inc are also represented in the SCHD’s holdings at 3.96% and 3.96%.

VOE - Holdings

VOE HoldingsWeight
Carrier Global Corp Ordinary Shares1.28%
International Flavors & Fragrances Inc1.13%
Motorola Solutions Inc1.12%
Discover Financial Services1.09%
Welltower Inc1.05%
Corteva Inc0.99%
Valero Energy Corp0.97%
Corning Inc0.95%
Willis Towers Watson PLC0.9%
D.R. Horton Inc0.89%

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%.

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Risk Analysis

SCHDVOE
Mean Return01.05
R-squared088.76
Std. Deviation015.98
Alpha0-3.77
Beta01.11
Sharpe Ratio00.75
Treynor Ratio010.19

The Schwab U.S. Dividend Equity ETF (SCHD) has a Standard Deviation of 0 with a Sharpe Ratio of 0 and a Alpha of 0. Its R-squared is 0 while SCHD’s Beta is 0. Furthermore, the fund has a Mean Return of 0 and a Treynor Ratio of 0.

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

SCHD’s Mean Return is 1.05 points lower than that of VOE and its R-squared is 88.76 points lower. With a Standard Deviation of 0, SCHD is slightly less volatile than VOE. The Alpha and Beta of SCHD are 3.77 points higher and 1.11 points lower than VOE’s Alpha and Beta.

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Performance

Annual Returns

SCHD vs. VOE - Annual Returns

YearSCHDVOE
202015.11%2.5%
201927.28%27.98%
2018-5.46%-12.41%
201720.88%17.05%
201616.25%15.26%
2015-0.21%-1.8%
201411.66%13.98%
201332.9%37.65%
201211.4%16.04%
20110.0%-0.32%
20100.0%21.83%

SCHD had its best year in 2013 with an annual return of 32.9%. SCHD’s worst year over the past decade yielded -5.46% and occurred in 2018. In most years the Schwab U.S. Dividend Equity ETF provided moderate returns such as in 2012, 2014, and 2020 where annual returns amounted to 11.4%, 11.66%, and 15.11% 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

SCHD vs. VOE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
SCHD$10,000$28,82314.80%
VOE$10,000$23,88212.52%

A $10,000 investment in SCHD would have resulted in a final balance of $28,823. This is a profit of $18,823 over 8 years and amounts to a compound annual growth rate (CAGR) of 14.80%.

With a $10,000 investment in VOE, the end total would have been $23,882. This equates to a $13,882 profit over 8 years and a compound annual growth rate (CAGR) of 12.52%.

SCHD’s CAGR is 2.28 percentage points higher than that of VOE and as a result, would have yielded $4,941 more on a $10,000 investment. Thus, SCHD outperformed VOE by 2.28% annually.


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