The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) and the Schwab International Equity ETF (SCHF) are both among the Top 100 ETFs. VEU is a Vanguard Foreign Large Blend fund and SCHF is a Schwab ETFs Foreign Large Blend fund. So, what’s the difference between VEU and SCHF? And which fund is better?
The expense ratio of VEU is 0.02 percentage points higher than SCHF’s (0.08% vs. 0.06%). VEU also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VEU has provided higher returns than SCHF over the past ten years.
In this article, we’ll compare VEU vs. SCHF. We’ll look at holdings and annual returns, as well as at their industry exposure and fund composition. Moreover, I’ll also discuss VEU’s and SCHF’s portfolio growth, risk metrics, and performance and examine how these affect their overall returns.
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Summary
| VEU | SCHF | |
| Name | Vanguard FTSE All-World ex-US Index Fund ETF Shares | Schwab International Equity ETF |
| Category | Foreign Large Blend | Foreign Large Blend |
| Issuer | Vanguard | Schwab ETFs |
| AUM | 53.64B | 26.99B |
| Avg. Return | 6.64% | 6.43% |
| Div. Yield | 2.31% | 2.16% |
| Expense Ratio | 0.08% | 0.06% |
The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 53.64B total assets under management and has yielded an average annual return of 6.64% over the past 10 years. The fund has a dividend yield of 2.31% with an expense ratio of 0.08%.
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%.
VEU’s dividend yield is 0.15% higher than that of SCHF (2.31% vs. 2.16%). Also, VEU yielded on average 0.21% more per year over the past decade (6.64% vs. 6.43%). The expense ratio of VEU is 0.02 percentage points higher than SCHF’s (0.08% vs. 0.06%).
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Fund Composition
Industry Exposure
| VEU | SCHF | |
| Technology | 12.94% | 11.55% |
| Industrials | 12.19% | 14.86% |
| Energy | 4.69% | 4.23% |
| Communication Services | 7.44% | 5.65% |
| Utilities | 2.89% | 3.09% |
| Healthcare | 9.34% | 11.05% |
| Consumer Defensive | 8.28% | 9.41% |
| Real Estate | 3.04% | 3.17% |
| Financial Services | 18.46% | 17.85% |
| Consumer Cyclical | 12.57% | 10.87% |
| Basic Materials | 8.17% | 8.26% |
The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) has the most exposure to the Financial Services sector at 18.46%. This is followed by Technology and Consumer Cyclical at 12.94% and 12.57% respectively. Real Estate (3.04%), Energy (4.69%), and Communication Services (7.44%) only make up 15.17% of the fund’s total assets.
VEU’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Healthcare, Industrials, and Consumer Cyclical stocks at 8.17%, 8.28%, 9.34%, 12.19%, and 12.57%.
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%.
VEU is 0.61% more exposed to the Financial Services sector than SCHF (18.46% vs 17.85%). VEU’s exposure to Technology and Consumer Cyclical stocks is 1.39% higher and 1.70% higher respectively (12.94% vs. 11.55% and 12.57% vs. 10.87%). In total, Real Estate, Energy, and Communication Services also make up 2.12% more of the fund’s holdings compared to SCHF (15.17% vs. 13.05%).
Holdings
| VEU Holdings | Weight |
| Tencent Holdings Ltd | 1.57% |
| Alibaba Group Holding Ltd Ordinary Shares | 1.4% |
| Nestle SA | 1.22% |
| Taiwan Semiconductor Manufacturing Co Ltd | 0.98% |
| ASML Holding NV | 0.95% |
| Taiwan Semiconductor Manufacturing Co Ltd ADR | 0.91% |
| Roche Holding AG | 0.91% |
| Toyota Motor Corp | 0.75% |
| LVMH Moet Hennessy Louis Vuitton SE | 0.68% |
| Novartis AG | 0.67% |
VEU’s Top Holdings are Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, Taiwan Semiconductor Manufacturing Co Ltd, and ASML Holding NV at 1.57%, 1.4%, 1.22%, 0.98%, and 0.95%.
Taiwan Semiconductor Manufacturing Co Ltd ADR (0.91%), Roche Holding AG (0.91%), and Toyota Motor Corp (0.75%) have a slightly smaller but still significant weight. LVMH Moet Hennessy Louis Vuitton SE and Novartis AG are also represented in the VEU’s holdings at 0.68% and 0.67%.
| 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%.
Risk Analysis
| VEU | SCHF | |
| Mean Return | 0.56 | 0.58 |
| R-squared | 98.44 | 98.16 |
| Std. Deviation | 15.08 | 15.08 |
| Alpha | 0.28 | 0.53 |
| Beta | 0.99 | 0.99 |
| Sharpe Ratio | 0.4 | 0.42 |
| Treynor Ratio | 5.12 | 5.39 |
The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) has a R-squared of 98.44 with a Beta of 0.99 and a Treynor Ratio of 5.12. Its Mean Return is 0.56 while VEU’s Sharpe Ratio is 0.4. Furthermore, the fund has a Standard Deviation of 15.08 and a Alpha of 0.28.
The Schwab International Equity ETF (SCHF) has a Sharpe Ratio of 0.42 with a Mean Return of 0.58 and a R-squared of 98.16. Its Alpha is 0.53 while SCHF’s Standard Deviation is 15.08. Furthermore, the fund has a Beta of 0.99 and a Treynor Ratio of 5.39.
VEU’s Mean Return is 0.02 points lower than that of SCHF and its R-squared is 0.28 points higher. With a Standard Deviation of 15.08, VEU is slightly less volatile than SCHF. The Alpha and Beta of VEU are 0.25 points lower and 0.00 points lower than SCHF’s Alpha and Beta.
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Performance
Annual Returns
| Year | VEU | SCHF |
| 2020 | 11.39% | 9.86% |
| 2019 | 21.63% | 22.15% |
| 2018 | -13.97% | -14.39% |
| 2017 | 27.27% | 25.83% |
| 2016 | 4.77% | 2.88% |
| 2015 | -4.67% | -2.44% |
| 2014 | -4.05% | -4.44% |
| 2013 | 14.5% | 20.03% |
| 2012 | 18.55% | 17.12% |
| 2011 | -14.25% | -12.32% |
| 2010 | 11.85% | 8.6% |
VEU had its best year in 2017 with an annual return of 27.27%. VEU’s worst year over the past decade yielded -14.25% and occurred in 2011. In most years the Vanguard FTSE All-World ex-US Index Fund ETF Shares provided moderate returns such as in 2016, 2020, and 2010 where annual returns amounted to 4.77%, 11.39%, and 11.85% 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 |
| VEU | $10,000 | $16,546 | 6.64% |
| SCHF | $10,000 | $17,089 | 6.43% |
A $10,000 investment in VEU would have resulted in a final balance of $16,546. This is a profit of $6,546 over 10 years and amounts to a compound annual growth rate (CAGR) of 6.64%.
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%.
VEU’s CAGR is 0.21 percentage points higher than that of SCHF and as a result, would have yielded $543 less on a $10,000 investment. Thus, VEU outperformed SCHF by 0.21% annually.
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