SCHX vs. VOE: What’s The Difference?

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

The expense ratio of SCHX is 0.04 percentage points lower than VOE’s (0.03% vs. 0.07%). SCHX also has a higher exposure to the technology sector and a lower standard deviation. Overall, SCHX has provided higher returns than VOE over the past ten years.

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

Summary

SCHX VOE
Name Schwab U.S. Large-Cap ETF Vanguard Mid-Cap Value Index Fund ETF Shares
Category Large Blend Mid-Cap Value
Issuer Schwab ETFs Vanguard
AUM 30.89B 26.78B
Avg. Return 14.60% 12.52%
Div. Yield 1.41% 1.87%
Expense Ratio 0.03% 0.07%

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 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%.

SCHX’s dividend yield is 0.46% lower than that of VOE (1.41% vs. 1.87%). Also, SCHX yielded on average 2.08% more per year over the past decade (14.60% vs. 12.52%). The expense ratio of SCHX is 0.04 percentage points lower than VOE’s (0.03% vs. 0.07%).

Fund Composition

Industry Exposure

SCHX vs. VOE - Industry Exposure

SCHX VOE
Technology 25.13% 9.85%
Industrials 8.65% 9.4%
Energy 2.72% 5.69%
Communication Services 11.26% 5.27%
Utilities 2.37% 10.93%
Healthcare 13.04% 7.04%
Consumer Defensive 5.97% 4.85%
Real Estate 3.13% 11.48%
Financial Services 13.82% 18.26%
Consumer Cyclical 11.63% 11.8%
Basic Materials 2.28% 5.44%

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 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%.

SCHX is 15.28% more exposed to the Technology sector than VOE (25.13% vs 9.85%). SCHX’s exposure to Financial Services and Healthcare stocks is 4.44% lower and 6.00% higher respectively (13.82% vs. 18.26% and 13.04% vs. 7.04%). In total, Utilities, Energy, and Real Estate also make up 19.88% less of the fund’s holdings compared to VOE (8.22% vs. 28.10%).

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%.

VOE - Holdings

VOE Holdings Weight
Carrier Global Corp Ordinary Shares 1.28%
International Flavors & Fragrances Inc 1.13%
Motorola Solutions Inc 1.12%
Discover Financial Services 1.09%
Welltower Inc 1.05%
Corteva Inc 0.99%
Valero Energy Corp 0.97%
Corning Inc 0.95%
Willis Towers Watson PLC 0.9%
D.R. Horton Inc 0.89%

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%.

Risk Analysis

SCHX VOE
Mean Return 1.24 1.05
R-squared 99.83 88.76
Std. Deviation 13.8 15.98
Alpha -0.14 -3.77
Beta 1.02 1.11
Sharpe Ratio 1.03 0.75
Treynor Ratio 14.06 10.19

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

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

SCHX’s Mean Return is 0.19 points higher than that of VOE and its R-squared is 11.07 points higher. With a Standard Deviation of 13.8, SCHX is slightly less volatile than VOE. The Alpha and Beta of SCHX are 3.63 points higher and 0.09 points lower than VOE’s Alpha and Beta.

Performance

Annual Returns

SCHX vs. VOE - Annual Returns

Year SCHX VOE
2020 20.9% 2.5%
2019 31.4% 27.98%
2018 -4.52% -12.41%
2017 21.91% 17.05%
2016 11.78% 15.26%
2015 1.02% -1.8%
2014 13.33% 13.98%
2013 32.54% 37.65%
2012 16.06% 16.04%
2011 1.61% -0.32%
2010 15.88% 21.83%

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 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

SCHX vs. VOE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SCHX $10,000 $36,987 14.60%
VOE $10,000 $27,625 12.52%

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 VOE, the end total would have been $27,625. This equates to a $17,625 profit over 10 years and a compound annual growth rate (CAGR) of 12.52%.

SCHX’s CAGR is 2.08 percentage points higher than that of VOE and as a result, would have yielded $9,362 more on a $10,000 investment. Thus, SCHX outperformed VOE by 2.08% annually.


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