The Schwab International Equity ETF (SCHF) and the Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) are both among the Top 100 ETFs. SCHF is a Schwab ETFs Foreign Large Blend fund and VBK is a Vanguard Small Growth fund. So, what’s the difference between SCHF and VBK? And which fund is better?
The expense ratio of SCHF is 0.01 percentage points lower than VBK’s (0.06% vs. 0.07%). SCHF also has a higher exposure to the financial services sector and a lower standard deviation. Overall, SCHF has provided lower returns than VBK over the past 10 years.
In this article, we’ll compare SCHF vs. VBK. We’ll look at risk metrics and industry exposure, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss SCHF’s and VBK’s fund composition, holdings, and performance and examine how these affect their overall returns.
|Name||Schwab International Equity ETF||Vanguard Small-Cap Growth Index Fund ETF Shares|
|Category||Foreign Large Blend||Small Growth|
The Schwab International Equity ETF (SCHF) is a Foreign Large Blend fund that is issued by Schwab ETFs. It currently has 26.99B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 2.16% with an expense ratio of 0.06%.
The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) is a Small Growth fund that is issued by Vanguard. It currently has 37.89B total assets under management and has yielded an average annual return of 16.53% over the past 10 years. The fund has a dividend yield of 0.45% with an expense ratio of 0.07%.
SCHF’s dividend yield is 1.71% higher than that of VBK (2.16% vs. 0.45%). Also, SCHF yielded on average 10.10% less per year over the past decade (6.43% vs. 16.53%). The expense ratio of SCHF is 0.01 percentage points lower than VBK’s (0.06% vs. 0.07%).
The Schwab International Equity ETF (SCHF) has the most exposure to the Financial Services sector at 17.85%. This is followed by Industrials and Technology at 14.86% and 11.55% respectively. Real Estate (3.17%), Energy (4.23%), and Communication Services (5.65%) only make up 13.05% of the fund’s total assets.
SCHF’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Consumer Cyclical, Healthcare, and Technology stocks at 8.26%, 9.41%, 10.87%, 11.05%, and 11.55%.
The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has the most exposure to the Technology sector at 27.87%. This is followed by Healthcare and Industrials at 23.24% and 13.19% respectively. Energy (1.77%), Basic Materials (2.49%), and Communication Services (3.24%) only make up 7.50% of the fund’s total assets.
VBK’s mid-section with moderate exposure is comprised of Consumer Defensive, Financial Services, Real Estate, Consumer Cyclical, and Industrials stocks at 3.83%, 4.05%, 7.87%, 12.13%, and 13.19%.
SCHF is 13.80% more exposed to the Financial Services sector than VBK (17.85% vs 4.05%). SCHF’s exposure to Industrials and Technology stocks is 1.67% higher and 16.32% lower respectively (14.86% vs. 13.19% and 11.55% vs. 27.87%). In total, Real Estate, Energy, and Communication Services also make up 0.17% more of the fund’s holdings compared to VBK (13.05% vs. 12.88%).
|Samsung Electronics Co Ltd||1.6%|
|ASML Holding NV||1.29%|
|Roche Holding AG||1.24%|
|Toyota Motor Corp||1.02%|
|LVMH Moet Hennessy Louis Vuitton SE||0.93%|
|Shopify Inc A||0.78%|
SCHF’s Top Holdings are Nestle SA, Samsung Electronics Co Ltd, ASML Holding NV, Roche Holding AG, and Toyota Motor Corp at 1.66%, 1.6%, 1.29%, 1.24%, and 1.02%.
LVMH Moet Hennessy Louis Vuitton SE (0.93%), Novartis AG (0.92%), and Shopify Inc A (0.78%) have a slightly smaller but still significant weight. AstraZeneca PLC and SAP SE are also represented in the SCHF’s holdings at 0.75% and 0.74%.
|Charles River Laboratories International Inc||0.78%|
|Fair Isaac Corp||0.57%|
|Bill.com Holdings Inc Ordinary Shares||0.56%|
VBK’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.78%, 0.73%, 0.73%, 0.73%, and 0.72%.
Entegris Inc (0.7%), PTC Inc (0.62%), and Fair Isaac Corp (0.57%) have a slightly smaller but still significant weight. Bill.com Holdings Inc Ordinary Shares and Avalara Inc are also represented in the VBK’s holdings at 0.56% and 0.55%.
The Schwab International Equity ETF (SCHF) has a Alpha of 0.53 with a Beta of 0.99 and a Standard Deviation of 15.08. Its Treynor Ratio is 5.39 while SCHF’s Sharpe Ratio is 0.42. Furthermore, the fund has a Mean Return of 0.58 and a R-squared of 98.16.
The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has a Standard Deviation of 17.95 with a Treynor Ratio of 11.18 and a Alpha of -2.81. Its Beta is 1.18 while VBK’s Mean Return is 1.22. Furthermore, the fund has a R-squared of 80.56 and a Sharpe Ratio of 0.78.
SCHF’s Mean Return is 0.64 points lower than that of VBK and its R-squared is 17.60 points higher. With a Standard Deviation of 15.08, SCHF is slightly less volatile than VBK. The Alpha and Beta of SCHF are 3.34 points higher and 0.19 points lower than VBK’s Alpha and Beta.
SCHF had its best year in 2017 with an annual return of 25.83%. SCHF’s worst year over the past decade yielded -14.39% and occurred in 2018. In most years the Schwab International Equity ETF provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to 2.88%, 8.6%, and 9.86% respectively.
The year 2013 was the strongest year for VBK, returning 38.18% on an annual basis. The poorest year for VBK in the last ten years was 2018, with a yield of -5.68%. Most years the Vanguard Small-Cap Growth Index Fund ETF Shares has given investors modest returns, such as in 2016, 2012, and 2017, when gains were 10.74%, 17.67%, and 21.9% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in SCHF would have resulted in a final balance of $17,089. This is a profit of $7,089 over 10 years and amounts to a compound annual growth rate (CAGR) of 6.43%.
With a $10,000 investment in VBK, the end total would have been $37,165. This equates to a $27,165 profit over 10 years and a compound annual growth rate (CAGR) of 16.53%.
SCHF’s CAGR is 10.10 percentage points lower than that of VBK and as a result, would have yielded $20,076 less on a $10,000 investment. Thus, SCHF performed worse than VBK by 10.10% annually.
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