SCHD vs. VXF: What’s The Difference?

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

SCHD and VXF have the same expense ratio: 0.06%. SCHD also has a higher exposure to the financial services sector and a lower standard deviation. Overall, SCHD has provided lower returns than VXF over the past 8 years.

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

Summary

SCHD VXF
Name Schwab U.S. Dividend Equity ETF Vanguard Extended Market Index Fund ETF Shares
Category Large Value Mid-Cap Growth
Issuer Schwab ETFs Vanguard
AUM 26B 114.53B
Avg. Return 14.80% 15.47%
Div. Yield 2.89% 1.19%
Expense Ratio 0.06% 0.06%

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 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%.

SCHD’s dividend yield is 1.70% higher than that of VXF (2.89% vs. 1.19%). Also, SCHD yielded on average 0.67% less per year over the past decade (14.80% vs. 15.47%). SCHD and VXF have the same expense ratio: 0.06%.

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Fund Composition

Industry Exposure

SCHD vs. VXF - Industry Exposure

SCHD VXF
Technology 16.26% 23.61%
Industrials 18.05% 11.31%
Energy 1.87% 2.46%
Communication Services 4.96% 7.29%
Utilities 0.0% 1.65%
Healthcare 12.64% 15.25%
Consumer Defensive 14.04% 3.09%
Real Estate 0.0% 8.16%
Financial Services 21.69% 12.56%
Consumer Cyclical 8.36% 11.35%
Basic Materials 2.13% 3.26%

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 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%.

SCHD is 9.13% more exposed to the Financial Services sector than VXF (21.69% vs 12.56%). SCHD’s exposure to Industrials and Technology stocks is 6.74% higher and 7.35% lower respectively (18.05% vs. 11.31% and 16.26% vs. 23.61%). In total, Utilities, Energy, and Basic Materials also make up 3.37% less of the fund’s holdings compared to VXF (4.00% vs. 7.37%).

Holdings

SCHD - Holdings

SCHD Holdings Weight
Merck & Co Inc 4.24%
The Home Depot Inc 4.19%
Texas Instruments Inc 4.16%
Broadcom Inc 4.15%
Amgen Inc 4.11%
PepsiCo Inc 4.09%
BlackRock Inc 4.05%
Pfizer Inc 3.97%
Verizon Communications Inc 3.96%
Cisco Systems Inc 3.96%

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%.

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

SCHD VXF
Mean Return 0 1.24
R-squared 0 85.73
Std. Deviation 0 18.04
Alpha 0 -3.26
Beta 0 1.23
Sharpe Ratio 0 0.79
Treynor Ratio 0 10.92

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

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

SCHD’s Mean Return is 1.24 points lower than that of VXF and its R-squared is 85.73 points lower. With a Standard Deviation of 0, SCHD is slightly less volatile than VXF. The Alpha and Beta of SCHD are 3.26 points higher and 1.23 points lower than VXF’s Alpha and Beta.

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Performance

Annual Returns

SCHD vs. VXF - Annual Returns

Year SCHD VXF
2020 15.11% 32.19%
2019 27.28% 28.04%
2018 -5.46% -9.37%
2017 20.88% 18.1%
2016 16.25% 16.16%
2015 -0.21% -3.26%
2014 11.66% 7.55%
2013 32.9% 38.37%
2012 11.4% 18.48%
2011 0.0% -3.61%
2010 0.0% 27.55%

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 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

SCHD vs. VXF - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHD $10,000 $28,823 14.80%
VXF $10,000 $30,295 15.47%

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 VXF, the end total would have been $30,295. This equates to a $20,295 profit over 8 years and a compound annual growth rate (CAGR) of 15.47%.

SCHD’s CAGR is 0.67 percentage points lower than that of VXF and as a result, would have yielded $1,472 less on a $10,000 investment. Thus, SCHD performed worse than VXF by 0.67% annually.


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