The Schwab U.S. Large-Cap ETF (SCHX) and the Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) are both among the Top 100 ETFs. SCHX is a Schwab ETFs Large Blend fund and VBK is a Vanguard Small Growth fund. So, what’s the difference between SCHX and VBK? And which fund is better?
The expense ratio of SCHX is 0.04 percentage points lower than VBK’s (0.03% vs. 0.07%). SCHX also has a lower exposure to the technology sector and a lower standard deviation. Overall, SCHX has provided lower returns than VBK over the past ten years.
In this article, we’ll compare SCHX vs. VBK. We’ll look at industry exposure and portfolio growth, as well as at their risk metrics and holdings. Moreover, I’ll also discuss SCHX’s and VBK’s performance, fund composition, and annual returns and examine how these affect their overall returns.
|Name||Schwab U.S. Large-Cap ETF||Vanguard Small-Cap Growth Index Fund ETF Shares|
|Category||Large Blend||Small Growth|
The Schwab U.S. Large-Cap ETF (SCHX) is a Large Blend fund that is issued by Schwab ETFs. It currently has 30.89B total assets under management and has yielded an average annual return of 14.60% over the past 10 years. The fund has a dividend yield of 1.41% with an expense ratio of 0.03%.
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%.
SCHX’s dividend yield is 0.96% higher than that of VBK (1.41% vs. 0.45%). Also, SCHX yielded on average 1.92% less per year over the past decade (14.60% vs. 16.53%). The expense ratio of SCHX is 0.04 percentage points lower than VBK’s (0.03% vs. 0.07%).
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The Schwab U.S. Large-Cap ETF (SCHX) has the most exposure to the Technology sector at 25.13%. This is followed by Financial Services and Healthcare at 13.82% and 13.04% respectively. Utilities (2.37%), Energy (2.72%), and Real Estate (3.13%) only make up 8.22% of the fund’s total assets.
SCHX’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.65%, 11.26%, 11.63%, and 13.04%.
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%.
SCHX is 2.74% less exposed to the Technology sector than VBK (25.13% vs 27.87%). SCHX’s exposure to Financial Services and Healthcare stocks is 9.77% higher and 10.20% lower respectively (13.82% vs. 4.05% and 13.04% vs. 23.24%). In total, Utilities, Energy, and Real Estate also make up 1.74% less of the fund’s holdings compared to VBK (8.22% vs. 9.96%).
|Facebook Inc A||2.08%|
|Alphabet Inc A||1.84%|
|Alphabet Inc Class C||1.78%|
|Berkshire Hathaway Inc Class B||1.32%|
|JPMorgan Chase & Co||1.18%|
SCHX’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 5.37%, 5.1%, 3.69%, 2.08%, and 1.84%.
Alphabet Inc Class C (1.78%), Berkshire Hathaway Inc Class B (1.32%), and Tesla Inc (1.31%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHX’s holdings at 1.25% and 1.18%.
|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%.
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The Schwab U.S. Large-Cap ETF (SCHX) has a R-squared of 99.83 with a Standard Deviation of 13.8 and a Mean Return of 1.24. Its Alpha is -0.14 while SCHX’s Treynor Ratio is 14.06. Furthermore, the fund has a Beta of 1.02 and a Sharpe Ratio of 1.03.
The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has a Mean Return of 1.22 with a Standard Deviation of 17.95 and a R-squared of 80.56. Its Sharpe Ratio is 0.78 while VBK’s Treynor Ratio is 11.18. Furthermore, the fund has a Alpha of -2.81 and a Beta of 1.18.
SCHX’s Mean Return is 0.02 points higher than that of VBK and its R-squared is 19.27 points higher. With a Standard Deviation of 13.8, SCHX is slightly less volatile than VBK. The Alpha and Beta of SCHX are 2.67 points higher and 0.16 points lower than VBK’s Alpha and Beta.
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SCHX had its best year in 2013 with an annual return of 32.54%. SCHX’s worst year over the past decade yielded -4.52% and occurred in 2018. In most years the Schwab U.S. Large-Cap ETF provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.33%, 15.88%, and 16.06% 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 SCHX would have resulted in a final balance of $36,987. This is a profit of $26,987 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.60%.
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%.
SCHX’s CAGR is 1.92 percentage points lower than that of VBK and as a result, would have yielded $178 less on a $10,000 investment. Thus, SCHX performed worse than VBK by 1.92% annually.
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