VIG vs. SCHF: What’s The Difference?

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) and the Schwab International Equity ETF (SCHF) are both among the Top 100 ETFs. VIG is a Vanguard Large Blend fund and SCHF is a Schwab ETFs Foreign Large Blend fund. So, what’s the difference between VIG and SCHF? And which fund is better?

VIG and SCHF have the same expense ratio: 0.06%. VIG also has a higher exposure to the industrials sector and a lower standard deviation. Overall, VIG has provided higher returns than SCHF over the past ten years.

In this article, we’ll compare VIG vs. SCHF. We’ll look at industry exposure and holdings, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss VIG’s and SCHF’s fund composition, performance, and risk metrics and examine how these affect their overall returns.

Summary

VIG SCHF
Name Vanguard Dividend Appreciation Index Fund ETF Shares Schwab International Equity ETF
Category Large Blend Foreign Large Blend
Issuer Vanguard Schwab ETFs
AUM 71.92B 26.99B
Avg. Return 13.35% 6.43%
Div. Yield 1.56% 2.16%
Expense Ratio 0.06% 0.06%

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) is a Large Blend fund that is issued by Vanguard. It currently has 71.92B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.56% with an expense ratio of 0.06%.

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%.

VIG’s dividend yield is 0.60% lower than that of SCHF (1.56% vs. 2.16%). Also, VIG yielded on average 6.92% more per year over the past decade (13.35% vs. 6.43%). VIG and SCHF have the same expense ratio: 0.06%.

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Fund Composition

Industry Exposure

VIG vs. SCHF - Industry Exposure

VIG SCHF
Technology 14.93% 11.55%
Industrials 17.23% 14.86%
Energy 0.0% 4.23%
Communication Services 2.86% 5.65%
Utilities 2.81% 3.09%
Healthcare 15.52% 11.05%
Consumer Defensive 15.32% 9.41%
Real Estate 0.0% 3.17%
Financial Services 17.18% 17.85%
Consumer Cyclical 10.47% 10.87%
Basic Materials 3.67% 8.26%

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has the most exposure to the Industrials sector at 17.23%. This is followed by Financial Services and Healthcare at 17.18% and 15.52% respectively. Energy (0.0%), Utilities (2.81%), and Communication Services (2.86%) only make up 5.67% of the fund’s total assets.

VIG’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Cyclical, Technology, Consumer Defensive, and Healthcare stocks at 3.67%, 10.47%, 14.93%, 15.32%, and 15.52%.

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%.

VIG is 2.37% more exposed to the Industrials sector than SCHF (17.23% vs 14.86%). VIG’s exposure to Financial Services and Healthcare stocks is 0.67% lower and 4.47% higher respectively (17.18% vs. 17.85% and 15.52% vs. 11.05%). In total, Energy, Utilities, and Communication Services also make up 7.30% less of the fund’s holdings compared to SCHF (5.67% vs. 12.97%).

Holdings

VIG - Holdings

VIG Holdings Weight
Microsoft Corp 4.19%
JPMorgan Chase & Co 3.8%
Johnson & Johnson 3.67%
Walmart Inc 3.38%
Visa Inc Class A 3.22%
UnitedHealth Group Inc 3.22%
The Home Depot Inc 2.91%
Procter & Gamble Co 2.82%
Comcast Corp Class A 2.21%
Coca-Cola Co 1.98%

VIG’s Top Holdings are Microsoft Corp, JPMorgan Chase & Co, Johnson & Johnson, Walmart Inc, and Visa Inc Class A at 4.19%, 3.8%, 3.67%, 3.38%, and 3.22%.

UnitedHealth Group Inc (3.22%), The Home Depot Inc (2.91%), and Procter & Gamble Co (2.82%) have a slightly smaller but still significant weight. Comcast Corp Class A and Coca-Cola Co are also represented in the VIG’s holdings at 2.21% and 1.98%.

SCHF - Holdings

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%.

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Risk Analysis

VIG SCHF
Mean Return 1.09 0.58
R-squared 92.2 98.16
Std. Deviation 12.25 15.08
Alpha 0.12 0.53
Beta 0.86 0.99
Sharpe Ratio 1.01 0.42
Treynor Ratio 14.33 5.39

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has a R-squared of 92.2 with a Beta of 0.86 and a Standard Deviation of 12.25. Its Sharpe Ratio is 1.01 while VIG’s Mean Return is 1.09. Furthermore, the fund has a Treynor Ratio of 14.33 and a Alpha of 0.12.

The Schwab International Equity ETF (SCHF) has a Beta of 0.99 with a Treynor Ratio of 5.39 and a Mean Return of 0.58. Its Sharpe Ratio is 0.42 while SCHF’s Standard Deviation is 15.08. Furthermore, the fund has a Alpha of 0.53 and a R-squared of 98.16.

VIG’s Mean Return is 0.51 points higher than that of SCHF and its R-squared is 5.96 points lower. With a Standard Deviation of 12.25, VIG is slightly less volatile than SCHF. The Alpha and Beta of VIG are 0.41 points lower and 0.13 points lower than SCHF’s Alpha and Beta.

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Performance

Annual Returns

VIG vs. SCHF - Annual Returns

Year VIG SCHF
2020 15.46% 9.86%
2019 29.71% 22.15%
2018 -2.02% -14.39%
2017 22.22% 25.83%
2016 11.84% 2.88%
2015 -1.95% -2.44%
2014 10.06% -4.44%
2013 28.99% 20.03%
2012 11.61% 17.12%
2011 6.21% -12.32%
2010 14.67% 8.6%

VIG had its best year in 2019 with an annual return of 29.71%. VIG’s worst year over the past decade yielded -2.02% and occurred in 2018. In most years the Vanguard Dividend Appreciation Index Fund ETF Shares provided moderate returns such as in 2012, 2016, and 2010 where annual returns amounted to 11.61%, 11.84%, and 14.67% 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

VIG vs. SCHF - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VIG $10,000 $33,096 13.35%
SCHF $10,000 $17,089 6.43%

A $10,000 investment in VIG would have resulted in a final balance of $33,096. This is a profit of $23,096 over 10 years and amounts to a compound annual growth rate (CAGR) of 13.35%.

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%.

VIG’s CAGR is 6.92 percentage points higher than that of SCHF and as a result, would have yielded $16,007 more on a $10,000 investment. Thus, VIG outperformed SCHF by 6.92% annually.


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