VIG vs. SCHG: What’s The Difference?

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) and the Schwab U.S. Large-Cap Growth ETF (SCHG) are both among the Top 100 ETFs. VIG is a Vanguard Large Blend fund and SCHG is a Schwab ETFs Large Growth fund. So, what’s the difference between VIG and SCHG? And which fund is better?

The expense ratio of VIG is 0.02 percentage points higher than SCHG’s (0.06% vs. 0.04%). VIG also has a higher exposure to the industrials sector and a lower standard deviation. Overall, VIG has provided lower returns than SCHG over the past ten years.

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

Summary

VIG SCHG
Name Vanguard Dividend Appreciation Index Fund ETF Shares Schwab U.S. Large-Cap Growth ETF
Category Large Blend Large Growth
Issuer Vanguard Schwab ETFs
AUM 71.92B 15.16B
Avg. Return 13.35% 17.81%
Div. Yield 1.56% 0.43%
Expense Ratio 0.06% 0.04%

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 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%.

VIG’s dividend yield is 1.13% higher than that of SCHG (1.56% vs. 0.43%). Also, VIG yielded on average 4.46% less per year over the past decade (13.35% vs. 17.81%). The expense ratio of VIG is 0.02 percentage points higher than SCHG’s (0.06% vs. 0.04%).

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Fund Composition

Industry Exposure

VIG vs. SCHG - Industry Exposure

VIG SCHG
Technology 14.93% 39.21%
Industrials 17.23% 3.01%
Energy 0.0% 0.2%
Communication Services 2.86% 17.07%
Utilities 2.81% 0.0%
Healthcare 15.52% 12.05%
Consumer Defensive 15.32% 2.15%
Real Estate 0.0% 1.64%
Financial Services 17.18% 7.98%
Consumer Cyclical 10.47% 15.01%
Basic Materials 3.67% 1.68%

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 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%.

VIG is 14.22% more exposed to the Industrials sector than SCHG (17.23% vs 3.01%). VIG’s exposure to Financial Services and Healthcare stocks is 9.20% higher and 3.47% higher respectively (17.18% vs. 7.98% and 15.52% vs. 12.05%). In total, Energy, Utilities, and Communication Services also make up 11.60% less of the fund’s holdings compared to SCHG (5.67% vs. 17.27%).

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%.

SCHG - Holdings

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%.

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Risk Analysis

VIG SCHG
Mean Return 1.09 1.46
R-squared 92.2 92.92
Std. Deviation 12.25 14.78
Alpha 0.12 1.97
Beta 0.86 1.05
Sharpe Ratio 1.01 1.14
Treynor Ratio 14.33 16.3

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

The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Alpha of 1.97 with a R-squared of 92.92 and a Sharpe Ratio of 1.14. Its Mean Return is 1.46 while SCHG’s Treynor Ratio is 16.3. Furthermore, the fund has a Standard Deviation of 14.78 and a Beta of 1.05.

VIG’s Mean Return is 0.37 points lower than that of SCHG and its R-squared is 0.72 points lower. With a Standard Deviation of 12.25, VIG is slightly less volatile than SCHG. The Alpha and Beta of VIG are 1.85 points lower and 0.19 points lower than SCHG’s Alpha and Beta.

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Performance

Annual Returns

VIG vs. SCHG - Annual Returns

Year VIG SCHG
2020 15.46% 39.13%
2019 29.71% 36.21%
2018 -2.02% -1.35%
2017 22.22% 28.04%
2016 11.84% 6.76%
2015 -1.95% 3.26%
2014 10.06% 15.74%
2013 28.99% 33.96%
2012 11.61% 17.02%
2011 6.21% -0.67%
2010 14.67% 16.83%

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 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

VIG vs. SCHG - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VIG $10,000 $33,096 13.35%
SCHG $10,000 $47,556 17.81%

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 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%.

VIG’s CAGR is 4.46 percentage points lower than that of SCHG and as a result, would have yielded $14,460 less on a $10,000 investment. Thus, VIG performed worse than SCHG by 4.46% annually.


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