SCHX vs. VGK: What’s The Difference?

The Schwab U.S. Large-Cap ETF (SCHX) and the Vanguard FTSE Europe Index Fund ETF Shares (VGK) are both among the Top 100 ETFs. SCHX is a Schwab ETFs Large Blend fund and VGK is a Vanguard Europe Stock fund. So, what’s the difference between SCHX and VGK? And which fund is better?

The expense ratio of SCHX is 0.05 percentage points lower than VGK’s (0.03% vs. 0.08%). SCHX also has a higher exposure to the technology sector and a lower standard deviation. Overall, SCHX has provided higher returns than VGK over the past ten years.

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

Summary

SCHX VGK
Name Schwab U.S. Large-Cap ETF Vanguard FTSE Europe Index Fund ETF Shares
Category Large Blend Europe Stock
Issuer Schwab ETFs Vanguard
AUM 30.89B 25.7B
Avg. Return 14.60% 6.68%
Div. Yield 1.41% 2.52%
Expense Ratio 0.03% 0.08%

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 FTSE Europe Index Fund ETF Shares (VGK) is a Europe Stock fund that is issued by Vanguard. It currently has 25.7B total assets under management and has yielded an average annual return of 6.68% over the past 10 years. The fund has a dividend yield of 2.52% with an expense ratio of 0.08%.

SCHX’s dividend yield is 1.11% lower than that of VGK (1.41% vs. 2.52%). Also, SCHX yielded on average 7.92% more per year over the past decade (14.60% vs. 6.68%). The expense ratio of SCHX is 0.05 percentage points lower than VGK’s (0.03% vs. 0.08%).

Fund Composition

Industry Exposure

SCHX vs. VGK - Industry Exposure

SCHX VGK
Technology 25.13% 8.3%
Industrials 8.65% 15.58%
Energy 2.72% 4.3%
Communication Services 11.26% 5.09%
Utilities 2.37% 3.89%
Healthcare 13.04% 13.76%
Consumer Defensive 5.97% 11.39%
Real Estate 3.13% 2.57%
Financial Services 13.82% 15.85%
Consumer Cyclical 11.63% 11.6%
Basic Materials 2.28% 7.67%

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 FTSE Europe Index Fund ETF Shares (VGK) has the most exposure to the Financial Services sector at 15.85%. This is followed by Industrials and Healthcare at 15.58% and 13.76% respectively. Utilities (3.89%), Energy (4.3%), and Communication Services (5.09%) only make up 13.28% of the fund’s total assets.

VGK’s mid-section with moderate exposure is comprised of Basic Materials, Technology, Consumer Defensive, Consumer Cyclical, and Healthcare stocks at 7.67%, 8.3%, 11.39%, 11.6%, and 13.76%.

SCHX is 16.83% more exposed to the Technology sector than VGK (25.13% vs 8.3%). SCHX’s exposure to Financial Services and Healthcare stocks is 2.03% lower and 0.72% lower respectively (13.82% vs. 15.85% and 13.04% vs. 13.76%). In total, Utilities, Energy, and Real Estate also make up 2.54% less of the fund’s holdings compared to VGK (8.22% vs. 10.76%).

Holdings

SCHX - Holdings

SCHX Holdings Weight
Apple Inc 5.37%
Microsoft Corp 5.1%
Amazon.com Inc 3.69%
Facebook Inc A 2.08%
Alphabet Inc A 1.84%
Alphabet Inc Class C 1.78%
Berkshire Hathaway Inc Class B 1.32%
Tesla Inc 1.31%
NVIDIA Corp 1.25%
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%.

VGK - Holdings

VGK Holdings Weight
Nestle SA 2.82%
ASML Holding NV 2.2%
Roche Holding AG 2.13%
LVMH Moet Hennessy Louis Vuitton SE 1.58%
Novartis AG 1.55%
AstraZeneca PLC 1.27%
SAP SE 1.25%
Unilever PLC 1.23%
Novo Nordisk A/S B 1.09%
Siemens AG 0.96%

VGK’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 2.82%, 2.2%, 2.13%, 1.58%, and 1.55%.

AstraZeneca PLC (1.27%), SAP SE (1.25%), and Unilever PLC (1.23%) have a slightly smaller but still significant weight. Novo Nordisk A/S B and Siemens AG are also represented in the VGK’s holdings at 1.09% and 0.96%.

Risk Analysis

SCHX VGK
Mean Return 1.24 0.61
R-squared 99.83 92.76
Std. Deviation 13.8 16.65
Alpha -0.14 0.45
Beta 1.02 1.06
Sharpe Ratio 1.03 0.4
Treynor Ratio 14.06 5.12

The Schwab U.S. Large-Cap ETF (SCHX) has a Treynor Ratio of 14.06 with a Beta of 1.02 and a Alpha of -0.14. Its Standard Deviation is 13.8 while SCHX’s Mean Return is 1.24. Furthermore, the fund has a Sharpe Ratio of 1.03 and a R-squared of 99.83.

The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has a Treynor Ratio of 5.12 with a Standard Deviation of 16.65 and a Sharpe Ratio of 0.4. Its Beta is 1.06 while VGK’s R-squared is 92.76. Furthermore, the fund has a Alpha of 0.45 and a Mean Return of 0.61.

SCHX’s Mean Return is 0.63 points higher than that of VGK and its R-squared is 7.07 points higher. With a Standard Deviation of 13.8, SCHX is slightly less volatile than VGK. The Alpha and Beta of SCHX are 0.59 points lower and 0.04 points lower than VGK’s Alpha and Beta.

Performance

Annual Returns

SCHX vs. VGK - Annual Returns

Year SCHX VGK
2020 20.9% 6.5%
2019 31.4% 24.26%
2018 -4.52% -14.79%
2017 21.91% 27.06%
2016 11.78% -0.59%
2015 1.02% -1.87%
2014 13.33% -6.56%
2013 32.54% 24.93%
2012 16.06% 21.01%
2011 1.61% -11.49%
2010 15.88% 5.01%

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 2017 was the strongest year for VGK, returning 27.06% on an annual basis. The poorest year for VGK in the last ten years was 2018, with a yield of -14.79%. Most years the Vanguard FTSE Europe Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were -0.59%, 5.01%, and 6.5% respectively.

Portfolio Growth

SCHX vs. VGK - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHX $10,000 $36,987 14.60%
VGK $10,000 $17,475 6.68%

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 VGK, the end total would have been $17,475. This equates to a $7,475 profit over 10 years and a compound annual growth rate (CAGR) of 6.68%.

SCHX’s CAGR is 7.92 percentage points higher than that of VGK and as a result, would have yielded $19,512 more on a $10,000 investment. Thus, SCHX outperformed VGK by 7.92% annually.


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