The Schwab U.S. Large-Cap ETF (SCHX) and the Vanguard Total World Stock Index Fund ETF Shares (VT) are both among the Top 100 ETFs. SCHX is a Schwab ETFs Large Blend fund and VT is a Vanguard N/A fund. So, what’s the difference between SCHX and VT? And which fund is better?
The expense ratio of SCHX is 0.05 percentage points lower than VT’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 VT over the past ten years.
In this article, we’ll compare SCHX vs. VT. We’ll look at industry exposure and portfolio growth, as well as at their performance and risk metrics. Moreover, I’ll also discuss SCHX’s and VT’s fund composition, holdings, and annual returns and examine how these affect their overall returns.
Summary
| SCHX | VT | |
| Name | Schwab U.S. Large-Cap ETF | Vanguard Total World Stock Index Fund ETF Shares |
| Category | Large Blend | N/A |
| Issuer | Schwab ETFs | Vanguard |
| AUM | 30.89B | 30.44B |
| Avg. Return | 14.60% | 10.42% |
| Div. Yield | 1.41% | 1.65% |
| 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 Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.
SCHX’s dividend yield is 0.24% lower than that of VT (1.41% vs. 1.65%). Also, SCHX yielded on average 4.19% more per year over the past decade (14.60% vs. 10.42%). The expense ratio of SCHX is 0.05 percentage points lower than VT’s (0.03% vs. 0.08%).
Fund Composition
Industry Exposure
| SCHX | VT | |
| Technology | 25.13% | 19.63% |
| Industrials | 8.65% | 10.7% |
| Energy | 2.72% | 3.48% |
| Communication Services | 11.26% | 9.02% |
| Utilities | 2.37% | 2.6% |
| Healthcare | 13.04% | 11.58% |
| Consumer Defensive | 5.97% | 6.71% |
| Real Estate | 3.13% | 3.64% |
| Financial Services | 13.82% | 15.36% |
| Consumer Cyclical | 11.63% | 12.32% |
| Basic Materials | 2.28% | 4.97% |
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 Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.
VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.
SCHX is 5.50% more exposed to the Technology sector than VT (25.13% vs 19.63%). SCHX’s exposure to Financial Services and Healthcare stocks is 1.54% lower and 1.46% higher respectively (13.82% vs. 15.36% and 13.04% vs. 11.58%). In total, Utilities, Energy, and Real Estate also make up 1.50% less of the fund’s holdings compared to VT (8.22% vs. 9.72%).
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%.
| VT Holdings | Weight |
| Apple Inc | 2.85% |
| Microsoft Corp | 2.71% |
| Amazon.com Inc | 1.98% |
| Facebook Inc Class A | 1.1% |
| Alphabet Inc Class A | 0.97% |
| Alphabet Inc Class C | 0.95% |
| Tesla Inc | 0.7% |
| NVIDIA Corp | 0.64% |
| JPMorgan Chase & Co | 0.62% |
| Tencent Holdings Ltd | 0.6% |
VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.
Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.
Risk Analysis
| SCHX | VT | |
| Mean Return | 1.24 | 0.9 |
| R-squared | 99.83 | 99.35 |
| Std. Deviation | 13.8 | 14.19 |
| Alpha | -0.14 | 0.2 |
| Beta | 1.02 | 1.01 |
| Sharpe Ratio | 1.03 | 0.71 |
| Treynor Ratio | 14.06 | 9.5 |
The Schwab U.S. Large-Cap ETF (SCHX) has a Beta of 1.02 with a Treynor Ratio of 14.06 and a Mean Return of 1.24. Its Alpha is -0.14 while SCHX’s Sharpe Ratio is 1.03. Furthermore, the fund has a R-squared of 99.83 and a Standard Deviation of 13.8.
The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Treynor Ratio of 9.5 with a Alpha of 0.2 and a R-squared of 99.35. Its Mean Return is 0.9 while VT’s Beta is 1.01. Furthermore, the fund has a Standard Deviation of 14.19 and a Sharpe Ratio of 0.71.
SCHX’s Mean Return is 0.34 points higher than that of VT and its R-squared is 0.48 points higher. With a Standard Deviation of 13.8, SCHX is slightly less volatile than VT. The Alpha and Beta of SCHX are 0.34 points lower and 0.01 points higher than VT’s Alpha and Beta.
Performance
Annual Returns
| Year | SCHX | VT |
| 2020 | 20.9% | 16.74% |
| 2019 | 31.4% | 26.8% |
| 2018 | -4.52% | -9.67% |
| 2017 | 21.91% | 24.19% |
| 2016 | 11.78% | 8.77% |
| 2015 | 1.02% | -1.88% |
| 2014 | 13.33% | 3.97% |
| 2013 | 32.54% | 22.98% |
| 2012 | 16.06% | 17.33% |
| 2011 | 1.61% | -7.71% |
| 2010 | 15.88% | 13.05% |
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 2019 was the strongest year for VT, returning 26.8% on an annual basis. The poorest year for VT in the last ten years was 2018, with a yield of -9.67%. Most years the Vanguard Total World Stock Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 8.77%, 13.05%, and 16.74% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| SCHX | $10,000 | $36,987 | 14.60% |
| VT | $10,000 | $24,537 | 10.42% |
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 VT, the end total would have been $24,537. This equates to a $14,537 profit over 10 years and a compound annual growth rate (CAGR) of 10.42%.
SCHX’s CAGR is 4.19 percentage points higher than that of VT and as a result, would have yielded $12,450 more on a $10,000 investment. Thus, SCHX outperformed VT by 4.19% annually.
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