The Vanguard FTSE Europe Index Fund ETF Shares (VGK) and the Schwab U.S. Large-Cap Growth ETF (SCHG) are both among the Top 100 ETFs. VGK is a Vanguard Europe Stock fund and SCHG is a Schwab ETFs Large Growth fund. So, what’s the difference between VGK and SCHG? And which fund is better?
The expense ratio of VGK is 0.04 percentage points higher than SCHG’s (0.08% vs. 0.04%). VGK also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VGK has provided lower returns than SCHG over the past 10 years.
In this article, we’ll compare VGK vs. SCHG. We’ll look at portfolio growth and annual returns, as well as at their industry exposure and risk metrics. Moreover, I’ll also discuss VGK’s and SCHG’s fund composition, holdings, and performance and examine how these affect their overall returns.
Summary
| VGK | SCHG | |
| Name | Vanguard FTSE Europe Index Fund ETF Shares | Schwab U.S. Large-Cap Growth ETF |
| Category | Europe Stock | Large Growth |
| Issuer | Vanguard | Schwab ETFs |
| AUM | 25.7B | 15.16B |
| Avg. Return | 6.68% | 17.81% |
| Div. Yield | 2.52% | 0.43% |
| Expense Ratio | 0.08% | 0.04% |
The Vanguard FTSE Europe Index Fund ETF Shares (VGK) is a Europe Stock fund that is issued by Vanguard. It currently has 25.7B total assets under management and has yielded an average annual return of 6.68% over the past 10 years. The fund has a dividend yield of 2.52% with an expense ratio of 0.08%.
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%.
VGK’s dividend yield is 2.09% higher than that of SCHG (2.52% vs. 0.43%). Also, VGK yielded on average 11.13% less per year over the past decade (6.68% vs. 17.81%). The expense ratio of VGK is 0.04 percentage points higher than SCHG’s (0.08% vs. 0.04%).
Fund Composition
Industry Exposure
| VGK | SCHG | |
| Technology | 8.3% | 39.21% |
| Industrials | 15.58% | 3.01% |
| Energy | 4.3% | 0.2% |
| Communication Services | 5.09% | 17.07% |
| Utilities | 3.89% | 0.0% |
| Healthcare | 13.76% | 12.05% |
| Consumer Defensive | 11.39% | 2.15% |
| Real Estate | 2.57% | 1.64% |
| Financial Services | 15.85% | 7.98% |
| Consumer Cyclical | 11.6% | 15.01% |
| Basic Materials | 7.67% | 1.68% |
The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has the most exposure to the Financial Services sector at 15.85%. This is followed by Industrials and Healthcare at 15.58% and 13.76% respectively. Utilities (3.89%), Energy (4.3%), and Communication Services (5.09%) only make up 13.28% of the fund’s total assets.
VGK’s mid-section with moderate exposure is comprised of Basic Materials, Technology, Consumer Defensive, Consumer Cyclical, and Healthcare stocks at 7.67%, 8.3%, 11.39%, 11.6%, and 13.76%.
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%.
VGK is 7.87% more exposed to the Financial Services sector than SCHG (15.85% vs 7.98%). VGK’s exposure to Industrials and Healthcare stocks is 12.57% higher and 1.71% higher respectively (15.58% vs. 3.01% and 13.76% vs. 12.05%). In total, Utilities, Energy, and Communication Services also make up 3.99% less of the fund’s holdings compared to SCHG (13.28% vs. 17.27%).
Holdings
| VGK Holdings | Weight |
| Nestle SA | 2.82% |
| ASML Holding NV | 2.2% |
| Roche Holding AG | 2.13% |
| LVMH Moet Hennessy Louis Vuitton SE | 1.58% |
| Novartis AG | 1.55% |
| AstraZeneca PLC | 1.27% |
| SAP SE | 1.25% |
| Unilever PLC | 1.23% |
| Novo Nordisk A/S B | 1.09% |
| Siemens AG | 0.96% |
VGK’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 2.82%, 2.2%, 2.13%, 1.58%, and 1.55%.
AstraZeneca PLC (1.27%), SAP SE (1.25%), and Unilever PLC (1.23%) have a slightly smaller but still significant weight. Novo Nordisk A/S B and Siemens AG are also represented in the VGK’s holdings at 1.09% and 0.96%.
| 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%.
Risk Analysis
| VGK | SCHG | |
| Mean Return | 0.61 | 1.46 |
| R-squared | 92.76 | 92.92 |
| Std. Deviation | 16.65 | 14.78 |
| Alpha | 0.45 | 1.97 |
| Beta | 1.06 | 1.05 |
| Sharpe Ratio | 0.4 | 1.14 |
| Treynor Ratio | 5.12 | 16.3 |
The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has a Standard Deviation of 16.65 with a Treynor Ratio of 5.12 and a Sharpe Ratio of 0.4. Its R-squared is 92.76 while VGK’s Alpha is 0.45. Furthermore, the fund has a Mean Return of 0.61 and a Beta of 1.06.
The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Mean Return of 1.46 with a R-squared of 92.92 and a Sharpe Ratio of 1.14. Its Standard Deviation is 14.78 while SCHG’s Alpha is 1.97. Furthermore, the fund has a Beta of 1.05 and a Treynor Ratio of 16.3.
VGK’s Mean Return is 0.85 points lower than that of SCHG and its R-squared is 0.16 points lower. With a Standard Deviation of 16.65, VGK is slightly more volatile than SCHG. The Alpha and Beta of VGK are 1.52 points lower and 0.01 points higher than SCHG’s Alpha and Beta.
Performance
Annual Returns
| Year | VGK | SCHG |
| 2020 | 6.5% | 39.13% |
| 2019 | 24.26% | 36.21% |
| 2018 | -14.79% | -1.35% |
| 2017 | 27.06% | 28.04% |
| 2016 | -0.59% | 6.76% |
| 2015 | -1.87% | 3.26% |
| 2014 | -6.56% | 15.74% |
| 2013 | 24.93% | 33.96% |
| 2012 | 21.01% | 17.02% |
| 2011 | -11.49% | -0.67% |
| 2010 | 5.01% | 16.83% |
VGK had its best year in 2017 with an annual return of 27.06%. VGK’s worst year over the past decade yielded -14.79% and occurred in 2018. In most years the Vanguard FTSE Europe Index Fund ETF Shares provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to -0.59%, 5.01%, and 6.5% 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 |
| VGK | $10,000 | $17,475 | 6.68% |
| SCHG | $10,000 | $47,556 | 17.81% |
A $10,000 investment in VGK would have resulted in a final balance of $17,475. This is a profit of $7,475 over 10 years and amounts to a compound annual growth rate (CAGR) of 6.68%.
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%.
VGK’s CAGR is 11.13 percentage points lower than that of SCHG and as a result, would have yielded $30,081 less on a $10,000 investment. Thus, VGK performed worse than SCHG by 11.13% annually.
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