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VB vs. SCHG: What’s The Difference?

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

The expense ratio of VB is 0.01 percentage points higher than SCHG’s (0.05% vs. 0.04%). VB also has a lower exposure to the technology sector and a higher standard deviation. Overall, VB has provided lower returns than SCHG over the past ten years.

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

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Summary

VBSCHG
NameVanguard Small-Cap Index Fund ETF SharesSchwab U.S. Large-Cap Growth ETF
CategorySmall BlendLarge Growth
IssuerVanguardSchwab ETFs
AUM137.72B15.16B
Avg. Return14.25%17.81%
Div. Yield1.14%0.43%
Expense Ratio0.05%0.04%

The Vanguard Small-Cap Index Fund ETF Shares (VB) is a Small Blend fund that is issued by Vanguard. It currently has 137.72B total assets under management and has yielded an average annual return of 14.25% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.05%.

The Schwab U.S. Large-Cap Growth ETF (SCHG) is a Large Growth fund that is issued by Schwab ETFs. It currently has 15.16B total assets under management and has yielded an average annual return of 17.81% over the past 10 years. The fund has a dividend yield of 0.43% with an expense ratio of 0.04%.

VB’s dividend yield is 0.71% higher than that of SCHG (1.14% vs. 0.43%). Also, VB yielded on average 3.56% less per year over the past decade (14.25% vs. 17.81%). The expense ratio of VB is 0.01 percentage points higher than SCHG’s (0.05% vs. 0.04%).

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Fund Composition

Industry Exposure

VB vs. SCHG - Industry Exposure

VBSCHG
Technology16.85%39.21%
Industrials16.11%3.01%
Energy3.67%0.2%
Communication Services2.4%17.07%
Utilities2.19%0.0%
Healthcare14.34%12.05%
Consumer Defensive4.14%2.15%
Real Estate9.56%1.64%
Financial Services13.06%7.98%
Consumer Cyclical13.03%15.01%
Basic Materials4.63%1.68%

The Vanguard Small-Cap Index Fund ETF Shares (VB) has the most exposure to the Technology sector at 16.85%. This is followed by Industrials and Healthcare at 16.11% and 14.34% respectively. Communication Services (2.4%), Energy (3.67%), and Consumer Defensive (4.14%) only make up 10.21% of the fund’s total assets.

VB’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Healthcare stocks at 4.63%, 9.56%, 13.03%, 13.06%, and 14.34%.

The Schwab U.S. Large-Cap Growth ETF (SCHG) has the most exposure to the Technology sector at 39.21%. This is followed by Communication Services and Consumer Cyclical at 17.07% and 15.01% respectively. Energy (0.2%), Real Estate (1.64%), and Basic Materials (1.68%) only make up 3.52% of the fund’s total assets.

SCHG’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 2.15%, 3.01%, 7.98%, 12.05%, and 15.01%.

VB is 22.36% less exposed to the Technology sector than SCHG (16.85% vs 39.21%). VB’s exposure to Industrials and Healthcare stocks is 13.10% higher and 2.29% higher respectively (16.11% vs. 3.01% and 14.34% vs. 12.05%). In total, Communication Services, Energy, and Consumer Defensive also make up 9.21% less of the fund’s holdings compared to SCHG (10.21% vs. 19.42%).

Holdings

VB - Holdings

VB HoldingsWeight
Charles River Laboratories International Inc0.34%
Pool Corp0.32%
Bio-Techne Corp0.32%
Avantor Inc0.32%
PerkinElmer Inc0.31%
Diamondback Energy Inc0.31%
VICI Properties Inc Ordinary Shares0.3%
IDEX Corp0.3%
Entegris Inc0.3%
Novavax Inc0.29%

VB’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.34%, 0.32%, 0.32%, 0.32%, and 0.31%.

Diamondback Energy Inc (0.31%), VICI Properties Inc Ordinary Shares (0.3%), and IDEX Corp (0.3%) have a slightly smaller but still significant weight. Entegris Inc and Novavax Inc are also represented in the VB’s holdings at 0.3% and 0.29%.

SCHG - Holdings

SCHG HoldingsWeight
Apple Inc11.49%
Microsoft Corp10.91%
Amazon.com Inc7.89%
Facebook Inc A4.45%
Alphabet Inc A3.93%
Alphabet Inc Class C3.82%
Tesla Inc2.8%
NVIDIA Corp2.67%
Visa Inc Class A2.12%
UnitedHealth Group Inc2.02%

SCHG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 11.49%, 10.91%, 7.89%, 4.45%, and 3.93%.

Alphabet Inc Class C (3.82%), Tesla Inc (2.8%), and NVIDIA Corp (2.67%) have a slightly smaller but still significant weight. Visa Inc Class A and UnitedHealth Group Inc are also represented in the SCHG’s holdings at 2.12% and 2.02%.

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Risk Analysis

VBSCHG
Mean Return1.151.46
R-squared85.0392.92
Std. Deviation17.8214.78
Alpha-4.021.97
Beta1.211.05
Sharpe Ratio0.741.14
Treynor Ratio10.1516.3

The Vanguard Small-Cap Index Fund ETF Shares (VB) has a Sharpe Ratio of 0.74 with a R-squared of 85.03 and a Treynor Ratio of 10.15. Its Standard Deviation is 17.82 while VB’s Mean Return is 1.15. Furthermore, the fund has a Alpha of -4.02 and a Beta of 1.21.

The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Mean Return of 1.46 with a Treynor Ratio of 16.3 and a R-squared of 92.92. Its Sharpe Ratio is 1.14 while SCHG’s Beta is 1.05. Furthermore, the fund has a Standard Deviation of 14.78 and a Alpha of 1.97.

VB’s Mean Return is 0.31 points lower than that of SCHG and its R-squared is 7.89 points lower. With a Standard Deviation of 17.82, VB is slightly more volatile than SCHG. The Alpha and Beta of VB are 5.99 points lower and 0.16 points higher than SCHG’s Alpha and Beta.

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Performance

Annual Returns

VB vs. SCHG - Annual Returns

YearVBSCHG
202019.08%39.13%
201927.37%36.21%
2018-9.3%-1.35%
201716.24%28.04%
201618.31%6.76%
2015-3.65%3.26%
20147.51%15.74%
201337.8%33.96%
201218.22%17.02%
2011-2.68%-0.67%
201027.89%16.83%

VB had its best year in 2013 with an annual return of 37.8%. VB’s worst year over the past decade yielded -9.3% and occurred in 2018. In most years the Vanguard Small-Cap Index Fund ETF Shares provided moderate returns such as in 2017, 2012, and 2016 where annual returns amounted to 16.24%, 18.22%, and 18.31% respectively.

The year 2020 was the strongest year for SCHG, returning 39.13% on an annual basis. The poorest year for SCHG in the last ten years was 2018, with a yield of -1.35%. Most years the Schwab U.S. Large-Cap Growth ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 15.74%, 16.83%, and 17.02% respectively.

Portfolio Growth

VB vs. SCHG - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VB$10,000$31,06914.25%
SCHG$10,000$47,55617.81%

A $10,000 investment in VB would have resulted in a final balance of $31,069. This is a profit of $21,069 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.25%.

With a $10,000 investment in SCHG, the end total would have been $47,556. This equates to a $37,556 profit over 10 years and a compound annual growth rate (CAGR) of 17.81%.

VB’s CAGR is 3.56 percentage points lower than that of SCHG and as a result, would have yielded $16,487 less on a $10,000 investment. Thus, VB performed worse than SCHG by 3.56% annually.


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