The Vanguard Information Technology Index Fund ETF Shares (VGT) and the Schwab International Equity ETF (SCHF) are both among the Top 100 ETFs. VGT is a Vanguard Technology fund and SCHF is a Schwab ETFs Foreign Large Blend fund. So, what’s the difference between VGT and SCHF? And which fund is better?
The expense ratio of VGT is 0.04 percentage points higher than SCHF’s (0.1% vs. 0.06%). VGT also has a higher exposure to the technology sector and a higher standard deviation. Overall, VGT has provided higher returns than SCHF over the past ten years.
In this article, we’ll compare VGT vs. SCHF. We’ll look at annual returns and portfolio growth, as well as at their holdings and performance. Moreover, I’ll also discuss VGT’s and SCHF’s fund composition, risk metrics, and industry exposure and examine how these affect their overall returns.
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Summary
| VGT | SCHF | |
| Name | Vanguard Information Technology Index Fund ETF Shares | Schwab International Equity ETF |
| Category | Technology | Foreign Large Blend |
| Issuer | Vanguard | Schwab ETFs |
| AUM | 54.13B | 26.99B |
| Avg. Return | 20.84% | 6.43% |
| Div. Yield | 0.66% | 2.16% |
| Expense Ratio | 0.1% | 0.06% |
The Vanguard Information Technology Index Fund ETF Shares (VGT) is a Technology fund that is issued by Vanguard. It currently has 54.13B total assets under management and has yielded an average annual return of 20.84% over the past 10 years. The fund has a dividend yield of 0.66% with an expense ratio of 0.1%.
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%.
VGT’s dividend yield is 1.50% lower than that of SCHF (0.66% vs. 2.16%). Also, VGT yielded on average 14.41% more per year over the past decade (20.84% vs. 6.43%). The expense ratio of VGT is 0.04 percentage points higher than SCHF’s (0.1% vs. 0.06%).
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Fund Composition
Industry Exposure
| VGT | SCHF | |
| Technology | 88.89% | 11.55% |
| Industrials | 1.67% | 14.86% |
| Energy | 0.0% | 4.23% |
| Communication Services | 0.61% | 5.65% |
| Utilities | 0.0% | 3.09% |
| Healthcare | 0.0% | 11.05% |
| Consumer Defensive | 0.0% | 9.41% |
| Real Estate | 0.0% | 3.17% |
| Financial Services | 8.83% | 17.85% |
| Consumer Cyclical | 0.0% | 10.87% |
| Basic Materials | 0.0% | 8.26% |
The Vanguard Information Technology Index Fund ETF Shares (VGT) has the most exposure to the Technology sector at 88.89%. This is followed by Financial Services and Industrials at 8.83% and 1.67% respectively. Consumer Cyclical (0.0%), Real Estate (0.0%), and Consumer Defensive (0.0%) only make up 0.00% of the fund’s total assets.
VGT’s mid-section with moderate exposure is comprised of Healthcare, Utilities, Energy, Communication Services, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.61%, and 1.67%.
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%.
VGT is 77.34% more exposed to the Technology sector than SCHF (88.89% vs 11.55%). VGT’s exposure to Financial Services and Industrials stocks is 9.02% lower and 13.19% lower respectively (8.83% vs. 17.85% and 1.67% vs. 14.86%). In total, Consumer Cyclical, Real Estate, and Consumer Defensive also make up 23.45% less of the fund’s holdings compared to SCHF (0.00% vs. 23.45%).
Holdings
| VGT Holdings | Weight |
| Apple Inc | 19.58% |
| Microsoft Corp | 16.53% |
| NVIDIA Corp | 4.22% |
| Visa Inc Class A | 3.16% |
| PayPal Holdings Inc | 2.76% |
| Mastercard Inc Class A | 2.76% |
| Adobe Inc | 2.39% |
| Intel Corp | 1.94% |
| Salesforce.com Inc | 1.91% |
| Cisco Systems Inc | 1.9% |
VGT’s Top Holdings are Apple Inc, Microsoft Corp, NVIDIA Corp, Visa Inc Class A, and PayPal Holdings Inc at 19.58%, 16.53%, 4.22%, 3.16%, and 2.76%.
Mastercard Inc Class A (2.76%), Adobe Inc (2.39%), and Intel Corp (1.94%) have a slightly smaller but still significant weight. Salesforce.com Inc and Cisco Systems Inc are also represented in the VGT’s holdings at 1.91% and 1.9%.
| 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
| VGT | SCHF | |
| Mean Return | 1.76 | 0.58 |
| R-squared | 74.84 | 98.16 |
| Std. Deviation | 16.61 | 15.08 |
| Alpha | 10.41 | 0.53 |
| Beta | 1.02 | 0.99 |
| Sharpe Ratio | 1.23 | 0.42 |
| Treynor Ratio | 20.55 | 5.39 |
The Vanguard Information Technology Index Fund ETF Shares (VGT) has a Sharpe Ratio of 1.23 with a Mean Return of 1.76 and a Alpha of 10.41. Its R-squared is 74.84 while VGT’s Beta is 1.02. Furthermore, the fund has a Treynor Ratio of 20.55 and a Standard Deviation of 16.61.
The Schwab International Equity ETF (SCHF) has a Sharpe Ratio of 0.42 with a Treynor Ratio of 5.39 and a Alpha of 0.53. Its Mean Return is 0.58 while SCHF’s R-squared is 98.16. Furthermore, the fund has a Standard Deviation of 15.08 and a Beta of 0.99.
VGT’s Mean Return is 1.18 points higher than that of SCHF and its R-squared is 23.32 points lower. With a Standard Deviation of 16.61, VGT is slightly more volatile than SCHF. The Alpha and Beta of VGT are 9.88 points higher and 0.03 points higher than SCHF’s Alpha and Beta.
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Performance
Annual Returns
| Year | VGT | SCHF |
| 2020 | 45.94% | 9.86% |
| 2019 | 48.68% | 22.15% |
| 2018 | 2.52% | -14.39% |
| 2017 | 37.07% | 25.83% |
| 2016 | 13.73% | 2.88% |
| 2015 | 5.02% | -2.44% |
| 2014 | 18.01% | -4.44% |
| 2013 | 30.91% | 20.03% |
| 2012 | 14.05% | 17.12% |
| 2011 | 0.52% | -12.32% |
| 2010 | 12.74% | 8.6% |
VGT had its best year in 2019 with an annual return of 48.68%. VGT’s worst year over the past decade yielded 0.52% and occurred in 2011. In most years the Vanguard Information Technology Index Fund ETF Shares provided moderate returns such as in 2016, 2012, and 2014 where annual returns amounted to 13.73%, 14.05%, and 18.01% 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 |
| VGT | $10,000 | $64,500 | 20.84% |
| SCHF | $10,000 | $17,089 | 6.43% |
A $10,000 investment in VGT would have resulted in a final balance of $64,500. This is a profit of $54,500 over 10 years and amounts to a compound annual growth rate (CAGR) of 20.84%.
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%.
VGT’s CAGR is 14.41 percentage points higher than that of SCHF and as a result, would have yielded $47,411 more on a $10,000 investment. Thus, VGT outperformed SCHF by 14.41% annually.
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