The Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) and the Schwab U.S. Large-Cap Growth ETF (SCHG) are both among the Top 100 ETFs. VEA is a Vanguard Foreign Large Blend fund and SCHG is a Schwab ETFs Large Growth fund. So, what’s the difference between VEA and SCHG? And which fund is better?
The expense ratio of VEA is 0.01 percentage points higher than SCHG’s (0.05% vs. 0.04%). VEA also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VEA has provided lower returns than SCHG over the past ten years.
In this article, we’ll compare VEA vs. SCHG. We’ll look at holdings and risk metrics, as well as at their industry exposure and annual returns. Moreover, I’ll also discuss VEA’s and SCHG’s performance, portfolio growth, and fund composition and examine how these affect their overall returns.
Summary
| VEA | SCHG | |
| Name | Vanguard FTSE Developed Markets Index Fund ETF Shares | Schwab U.S. Large-Cap Growth ETF |
| Category | Foreign Large Blend | Large Growth |
| Issuer | Vanguard | Schwab ETFs |
| AUM | 157.48B | 15.16B |
| Avg. Return | 7.05% | 17.81% |
| Div. Yield | 2.49% | 0.43% |
| 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. 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%.
VEA’s dividend yield is 2.06% higher than that of SCHG (2.49% vs. 0.43%). Also, VEA yielded on average 10.76% less per year over the past decade (7.05% vs. 17.81%). The expense ratio of VEA is 0.01 percentage points higher than SCHG’s (0.05% vs. 0.04%).
Fund Composition
Industry Exposure
| VEA | SCHG | |
| Technology | 11.67% | 39.21% |
| Industrials | 15.47% | 3.01% |
| Energy | 4.17% | 0.2% |
| Communication Services | 5.41% | 17.07% |
| Utilities | 3.1% | 0.0% |
| Healthcare | 10.6% | 12.05% |
| Consumer Defensive | 8.61% | 2.15% |
| Real Estate | 4.04% | 1.64% |
| Financial Services | 17.39% | 7.98% |
| Consumer Cyclical | 11.31% | 15.01% |
| Basic Materials | 8.24% | 1.68% |
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. 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%.
VEA is 9.41% more exposed to the Financial Services sector than SCHG (17.39% vs 7.98%). VEA’s exposure to Industrials and Technology stocks is 12.46% higher and 27.54% lower respectively (15.47% vs. 3.01% and 11.67% vs. 39.21%). In total, Real Estate, Energy, and Communication Services also make up 5.29% less of the fund’s holdings compared to SCHG (13.62% vs. 18.91%).
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%.
| SCHG Holdings | Weight |
| Apple Inc | 11.49% |
| Microsoft Corp | 10.91% |
| Amazon.com Inc | 7.89% |
| Facebook Inc A | 4.45% |
| Alphabet Inc A | 3.93% |
| Alphabet Inc Class C | 3.82% |
| Tesla Inc | 2.8% |
| NVIDIA Corp | 2.67% |
| Visa Inc Class A | 2.12% |
| UnitedHealth Group Inc | 2.02% |
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%.
Performance
Annual Returns
| Year | VEA | SCHG |
| 2020 | 10.29% | 39.13% |
| 2019 | 22.08% | 36.21% |
| 2018 | -14.47% | -1.35% |
| 2017 | 26.44% | 28.04% |
| 2016 | 2.51% | 6.76% |
| 2015 | -0.21% | 3.26% |
| 2014 | -5.71% | 15.74% |
| 2013 | 22.12% | 33.96% |
| 2012 | 18.6% | 17.02% |
| 2011 | -12.57% | -0.67% |
| 2010 | 8.47% | 16.83% |
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 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
| Fund | Initial Balance | Final Balance | CAGR |
| VEA | $10,000 | $17,784 | 7.05% |
| SCHG | $10,000 | $47,556 | 17.81% |
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 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%.
VEA’s CAGR is 10.76 percentage points lower than that of SCHG and as a result, would have yielded $29,772 less on a $10,000 investment. Thus, VEA performed worse than SCHG by 10.76% annually.
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