The Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) and the Schwab U.S. Small-Cap ETF (SCHA) are both among the Top 100 ETFs. VEA is a Vanguard Foreign Large Blend fund and SCHA is a Schwab ETFs Small Blend fund. So, what’s the difference between VEA and SCHA? And which fund is better?
The expense ratio of VEA is 0.01 percentage points higher than SCHA’s (0.05% vs. 0.04%). VEA also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VEA has provided lower returns than SCHA over the past ten years.
In this article, we’ll compare VEA vs. SCHA. We’ll look at holdings and annual returns, as well as at their portfolio growth and performance. Moreover, I’ll also discuss VEA’s and SCHA’s risk metrics, industry exposure, and fund composition and examine how these affect their overall returns.
Summary
| VEA | SCHA | |
| Name | Vanguard FTSE Developed Markets Index Fund ETF Shares | Schwab U.S. Small-Cap ETF |
| Category | Foreign Large Blend | Small Blend |
| Issuer | Vanguard | Schwab ETFs |
| AUM | 157.48B | 16.51B |
| Avg. Return | 7.05% | 12.62% |
| Div. Yield | 2.49% | 0.98% |
| Expense Ratio | 0.05% | 0.04% |
The Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 157.48B total assets under management and has yielded an average annual return of 7.05% over the past 10 years. The fund has a dividend yield of 2.49% with an expense ratio of 0.05%.
The Schwab U.S. Small-Cap ETF (SCHA) is a Small Blend fund that is issued by Schwab ETFs. It currently has 16.51B total assets under management and has yielded an average annual return of 12.62% over the past 10 years. The fund has a dividend yield of 0.98% with an expense ratio of 0.04%.
VEA’s dividend yield is 1.51% higher than that of SCHA (2.49% vs. 0.98%). Also, VEA yielded on average 5.57% less per year over the past decade (7.05% vs. 12.62%). The expense ratio of VEA is 0.01 percentage points higher than SCHA’s (0.05% vs. 0.04%).
Fund Composition
Industry Exposure
| VEA | SCHA | |
| Technology | 11.67% | 14.91% |
| Industrials | 15.47% | 15.37% |
| Energy | 4.17% | 3.35% |
| Communication Services | 5.41% | 3.5% |
| Utilities | 3.1% | 1.83% |
| Healthcare | 10.6% | 16.5% |
| Consumer Defensive | 8.61% | 3.75% |
| Real Estate | 4.04% | 7.83% |
| Financial Services | 17.39% | 14.49% |
| Consumer Cyclical | 11.31% | 14.48% |
| Basic Materials | 8.24% | 3.98% |
The Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) has the most exposure to the Financial Services sector at 17.39%. This is followed by Industrials and Technology at 15.47% and 11.67% respectively. Real Estate (4.04%), Energy (4.17%), and Communication Services (5.41%) only make up 13.62% of the fund’s total assets.
VEA’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Healthcare, Consumer Cyclical, and Technology stocks at 8.24%, 8.61%, 10.6%, 11.31%, and 11.67%.
The Schwab U.S. Small-Cap ETF (SCHA) has the most exposure to the Healthcare sector at 16.5%. This is followed by Industrials and Technology at 15.37% and 14.91% respectively. Energy (3.35%), Communication Services (3.5%), and Consumer Defensive (3.75%) only make up 10.60% of the fund’s total assets.
SCHA’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Technology stocks at 3.98%, 7.83%, 14.48%, 14.49%, and 14.91%.
VEA is 2.90% more exposed to the Financial Services sector than SCHA (17.39% vs 14.49%). VEA’s exposure to Industrials and Technology stocks is 0.10% higher and 3.24% lower respectively (15.47% vs. 15.37% and 11.67% vs. 14.91%). In total, Real Estate, Energy, and Communication Services also make up 1.06% less of the fund’s holdings compared to SCHA (13.62% vs. 14.68%).
Holdings
| VEA Holdings | Weight |
| Nestle SA | 1.5% |
| Samsung Electronics Co Ltd | 1.4% |
| ASML Holding NV | 1.16% |
| Roche Holding AG | 1.1% |
| Toyota Motor Corp | 0.92% |
| LVMH Moet Hennessy Louis Vuitton SE | 0.84% |
| Novartis AG | 0.82% |
| Shopify Inc A | 0.7% |
| AstraZeneca PLC | 0.67% |
| SAP SE | 0.66% |
VEA’s Top Holdings are Nestle SA, Samsung Electronics Co Ltd, ASML Holding NV, Roche Holding AG, and Toyota Motor Corp at 1.5%, 1.4%, 1.16%, 1.1%, and 0.92%.
LVMH Moet Hennessy Louis Vuitton SE (0.84%), Novartis AG (0.82%), and Shopify Inc A (0.7%) have a slightly smaller but still significant weight. AstraZeneca PLC and SAP SE are also represented in the VEA’s holdings at 0.67% and 0.66%.
| SCHA Holdings | Weight |
| AMC Entertainment Holdings Inc Class A | 0.67% |
| Caesars Entertainment Inc | 0.51% |
| Cloudflare Inc | 0.48% |
| NovoCure Ltd | 0.45% |
| Plug Power Inc | 0.41% |
| 10x Genomics Inc Ordinary Shares – Class A | 0.34% |
| GameStop Corp Class A | 0.28% |
| RH | 0.27% |
| Penn National Gaming Inc | 0.27% |
| Axon Enterprise Inc | 0.27% |
SCHA’s Top Holdings are AMC Entertainment Holdings Inc Class A, Caesars Entertainment Inc, Cloudflare Inc, NovoCure Ltd, and Plug Power Inc at 0.67%, 0.51%, 0.48%, 0.45%, and 0.41%.
10x Genomics Inc Ordinary Shares – Class A (0.34%), GameStop Corp Class A (0.28%), and RH (0.27%) have a slightly smaller but still significant weight. Penn National Gaming Inc and Axon Enterprise Inc are also represented in the SCHA’s holdings at 0.27% and 0.27%.
Performance
Annual Returns
| Year | VEA | SCHA |
| 2020 | 10.29% | 19.35% |
| 2019 | 22.08% | 26.54% |
| 2018 | -14.47% | -11.75% |
| 2017 | 26.44% | 15.04% |
| 2016 | 2.51% | 19.88% |
| 2015 | -0.21% | -4.24% |
| 2014 | -5.71% | 6.53% |
| 2013 | 22.12% | 39.59% |
| 2012 | 18.6% | 18.24% |
| 2011 | -12.57% | -2.95% |
| 2010 | 8.47% | 28.31% |
VEA had its best year in 2017 with an annual return of 26.44%. VEA’s worst year over the past decade yielded -14.47% and occurred in 2018. In most years the Vanguard FTSE Developed Markets Index Fund ETF Shares provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to 2.51%, 8.47%, and 10.29% respectively.
The year 2013 was the strongest year for SCHA, returning 39.59% on an annual basis. The poorest year for SCHA in the last ten years was 2018, with a yield of -11.75%. Most years the Schwab U.S. Small-Cap ETF has given investors modest returns, such as in 2017, 2012, and 2020, when gains were 15.04%, 18.24%, and 19.35% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VEA | $10,000 | $17,784 | 7.05% |
| SCHA | $10,000 | $30,035 | 12.62% |
A $10,000 investment in VEA would have resulted in a final balance of $17,784. This is a profit of $7,784 over 10 years and amounts to a compound annual growth rate (CAGR) of 7.05%.
With a $10,000 investment in SCHA, the end total would have been $30,035. This equates to a $20,035 profit over 10 years and a compound annual growth rate (CAGR) of 12.62%.
VEA’s CAGR is 5.57 percentage points lower than that of SCHA and as a result, would have yielded $12,251 less on a $10,000 investment. Thus, VEA performed worse than SCHA by 5.57% annually.
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