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 | 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 | 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 | 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
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
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.
Current recommendations:
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.