The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) and the Schwab U.S. Large-Cap ETF (SCHX) are both among the Top 100 ETFs. VIG is a Vanguard Large Blend fund and SCHX is a Schwab ETFs Large Blend fund. So, what’s the difference between VIG and SCHX? And which fund is better?
The expense ratio of VIG is 0.03 percentage points higher than SCHX’s (0.06% vs. 0.03%). VIG also has a higher exposure to the industrials sector and a lower standard deviation. Overall, VIG has provided lower returns than SCHX over the past ten years.
In this article, we’ll compare VIG vs. SCHX. We’ll look at risk metrics and portfolio growth, as well as at their holdings and performance. Moreover, I’ll also discuss VIG’s and SCHX’s annual returns, industry exposure, and fund composition and examine how these affect their overall returns.
|Name||Vanguard Dividend Appreciation Index Fund ETF Shares||Schwab U.S. Large-Cap ETF|
|Category||Large Blend||Large Blend|
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 ETF (SCHX) is a Large Blend fund that is issued by Schwab ETFs. It currently has 30.89B total assets under management and has yielded an average annual return of 14.60% over the past 10 years. The fund has a dividend yield of 1.41% with an expense ratio of 0.03%.
VIG’s dividend yield is 0.15% higher than that of SCHX (1.56% vs. 1.41%). Also, VIG yielded on average 1.26% less per year over the past decade (13.35% vs. 14.60%). The expense ratio of VIG is 0.03 percentage points higher than SCHX’s (0.06% vs. 0.03%).
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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 ETF (SCHX) has the most exposure to the Technology sector at 25.13%. This is followed by Financial Services and Healthcare at 13.82% and 13.04% respectively. Utilities (2.37%), Energy (2.72%), and Real Estate (3.13%) only make up 8.22% of the fund’s total assets.
SCHX’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.65%, 11.26%, 11.63%, and 13.04%.
VIG is 8.58% more exposed to the Industrials sector than SCHX (17.23% vs 8.65%). VIG’s exposure to Financial Services and Healthcare stocks is 3.36% higher and 2.48% higher respectively (17.18% vs. 13.82% and 15.52% vs. 13.04%). In total, Energy, Utilities, and Communication Services also make up 10.68% less of the fund’s holdings compared to SCHX (5.67% vs. 16.35%).
|JPMorgan Chase & Co||3.8%|
|Johnson & Johnson||3.67%|
|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%|
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%.
|Facebook Inc A||2.08%|
|Alphabet Inc A||1.84%|
|Alphabet Inc Class C||1.78%|
|Berkshire Hathaway Inc Class B||1.32%|
|JPMorgan Chase & Co||1.18%|
SCHX’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 5.37%, 5.1%, 3.69%, 2.08%, and 1.84%.
Alphabet Inc Class C (1.78%), Berkshire Hathaway Inc Class B (1.32%), and Tesla Inc (1.31%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHX’s holdings at 1.25% and 1.18%.
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The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has a Sharpe Ratio of 1.01 with a R-squared of 92.2 and a Standard Deviation of 12.25. Its Beta is 0.86 while VIG’s Treynor Ratio is 14.33. Furthermore, the fund has a Mean Return of 1.09 and a Alpha of 0.12.
The Schwab U.S. Large-Cap ETF (SCHX) has a Mean Return of 1.24 with a Alpha of -0.14 and a R-squared of 99.83. Its Beta is 1.02 while SCHX’s Treynor Ratio is 14.06. Furthermore, the fund has a Standard Deviation of 13.8 and a Sharpe Ratio of 1.03.
VIG’s Mean Return is 0.15 points lower than that of SCHX and its R-squared is 7.63 points lower. With a Standard Deviation of 12.25, VIG is slightly less volatile than SCHX. The Alpha and Beta of VIG are 0.26 points higher and 0.16 points lower than SCHX’s Alpha and Beta.
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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 2013 was the strongest year for SCHX, returning 32.54% on an annual basis. The poorest year for SCHX in the last ten years was 2018, with a yield of -4.52%. Most years the Schwab U.S. Large-Cap ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.33%, 15.88%, and 16.06% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 SCHX, the end total would have been $36,987. This equates to a $26,987 profit over 10 years and a compound annual growth rate (CAGR) of 14.60%.
VIG’s CAGR is 1.26 percentage points lower than that of SCHX and as a result, would have yielded $3,891 less on a $10,000 investment. Thus, VIG performed worse than SCHX by 1.26% annually.
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