The Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) and the Schwab International Equity ETF (SCHF) are both among the Top 100 ETFs. VEA is a Vanguard Foreign Large Blend fund and SCHF is a Schwab ETFs Foreign Large Blend fund. So, what’s the difference between VEA and SCHF? And which fund is better?
The expense ratio of VEA is 0.01 percentage points lower than SCHF’s (0.05% vs. 0.06%). VEA also has a lower exposure to the financial services sector and a higher standard deviation. Overall, VEA has provided higher returns than SCHF over the past ten years.
In this article, we’ll compare VEA vs. SCHF. We’ll look at holdings and fund composition, as well as at their industry exposure and annual returns. Moreover, I’ll also discuss VEA’s and SCHF’s portfolio growth, risk metrics, and performance and examine how these affect their overall returns.
Summary
| VEA | SCHF | |
| Name | Vanguard FTSE Developed Markets Index Fund ETF Shares | Schwab International Equity ETF |
| Category | Foreign Large Blend | Foreign Large Blend |
| Issuer | Vanguard | Schwab ETFs |
| AUM | 157.48B | 26.99B |
| Avg. Return | 7.05% | 6.43% |
| Div. Yield | 2.49% | 2.16% |
| Expense Ratio | 0.05% | 0.06% |
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 International Equity ETF (SCHF) is a Foreign Large Blend fund that is issued by Schwab ETFs. It currently has 26.99B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 2.16% with an expense ratio of 0.06%.
VEA’s dividend yield is 0.33% higher than that of SCHF (2.49% vs. 2.16%). Also, VEA yielded on average 0.62% more per year over the past decade (7.05% vs. 6.43%). The expense ratio of VEA is 0.01 percentage points lower than SCHF’s (0.05% vs. 0.06%).
Fund Composition
Industry Exposure
| VEA | SCHF | |
| Technology | 11.67% | 11.55% |
| Industrials | 15.47% | 14.86% |
| Energy | 4.17% | 4.23% |
| Communication Services | 5.41% | 5.65% |
| Utilities | 3.1% | 3.09% |
| Healthcare | 10.6% | 11.05% |
| Consumer Defensive | 8.61% | 9.41% |
| Real Estate | 4.04% | 3.17% |
| Financial Services | 17.39% | 17.85% |
| Consumer Cyclical | 11.31% | 10.87% |
| Basic Materials | 8.24% | 8.26% |
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 International Equity ETF (SCHF) has the most exposure to the Financial Services sector at 17.85%. This is followed by Industrials and Technology at 14.86% and 11.55% respectively. Real Estate (3.17%), Energy (4.23%), and Communication Services (5.65%) only make up 13.05% of the fund’s total assets.
SCHF’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Consumer Cyclical, Healthcare, and Technology stocks at 8.26%, 9.41%, 10.87%, 11.05%, and 11.55%.
VEA is 0.46% less exposed to the Financial Services sector than SCHF (17.39% vs 17.85%). VEA’s exposure to Industrials and Technology stocks is 0.61% higher and 0.12% higher respectively (15.47% vs. 14.86% and 11.67% vs. 11.55%). In total, Real Estate, Energy, and Communication Services also make up 0.57% more of the fund’s holdings compared to SCHF (13.62% vs. 13.05%).
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%.
| SCHF Holdings | Weight |
| Nestle SA | 1.66% |
| Samsung Electronics Co Ltd | 1.6% |
| ASML Holding NV | 1.29% |
| Roche Holding AG | 1.24% |
| Toyota Motor Corp | 1.02% |
| LVMH Moet Hennessy Louis Vuitton SE | 0.93% |
| Novartis AG | 0.92% |
| Shopify Inc A | 0.78% |
| AstraZeneca PLC | 0.75% |
| SAP SE | 0.74% |
SCHF’s Top Holdings are Nestle SA, Samsung Electronics Co Ltd, ASML Holding NV, Roche Holding AG, and Toyota Motor Corp at 1.66%, 1.6%, 1.29%, 1.24%, and 1.02%.
LVMH Moet Hennessy Louis Vuitton SE (0.93%), Novartis AG (0.92%), and Shopify Inc A (0.78%) have a slightly smaller but still significant weight. AstraZeneca PLC and SAP SE are also represented in the SCHF’s holdings at 0.75% and 0.74%.
Performance
Annual Returns
| Year | VEA | SCHF |
| 2020 | 10.29% | 9.86% |
| 2019 | 22.08% | 22.15% |
| 2018 | -14.47% | -14.39% |
| 2017 | 26.44% | 25.83% |
| 2016 | 2.51% | 2.88% |
| 2015 | -0.21% | -2.44% |
| 2014 | -5.71% | -4.44% |
| 2013 | 22.12% | 20.03% |
| 2012 | 18.6% | 17.12% |
| 2011 | -12.57% | -12.32% |
| 2010 | 8.47% | 8.6% |
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 2017 was the strongest year for SCHF, returning 25.83% on an annual basis. The poorest year for SCHF in the last ten years was 2018, with a yield of -14.39%. Most years the Schwab International Equity ETF has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 2.88%, 8.6%, and 9.86% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VEA | $10,000 | $17,784 | 7.05% |
| SCHF | $10,000 | $17,089 | 6.43% |
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 SCHF, the end total would have been $17,089. This equates to a $7,089 profit over 10 years and a compound annual growth rate (CAGR) of 6.43%.
VEA’s CAGR is 0.62 percentage points higher than that of SCHF and as a result, would have yielded $695 more on a $10,000 investment. Thus, VEA outperformed SCHF by 0.62% annually.
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