The Vanguard Mid-Cap Index Fund ETF Shares (VO) and the Schwab International Equity ETF (SCHF) are both among the Top 100 ETFs. VO is a Vanguard Mid-Cap Blend fund and SCHF is a Schwab ETFs Foreign Large Blend fund. So, what’s the difference between VO and SCHF? And which fund is better?
The expense ratio of VO is 0.02 percentage points lower than SCHF’s (0.04% vs. 0.06%). VO also has a higher exposure to the technology sector and a higher standard deviation. Overall, VO has provided higher returns than SCHF over the past ten years.
In this article, we’ll compare VO vs. SCHF. We’ll look at annual returns and fund composition, as well as at their risk metrics and portfolio growth. Moreover, I’ll also discuss VO’s and SCHF’s performance, industry exposure, and holdings and examine how these affect their overall returns.
|Name||Vanguard Mid-Cap Index Fund ETF Shares||Schwab International Equity ETF|
|Category||Mid-Cap Blend||Foreign Large Blend|
The Vanguard Mid-Cap Index Fund ETF Shares (VO) is a Mid-Cap Blend fund that is issued by Vanguard. It currently has 154.08B total assets under management and has yielded an average annual return of 14.34% over the past 10 years. The fund has a dividend yield of 1.23% with an expense ratio of 0.04%.
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%.
VO’s dividend yield is 0.93% lower than that of SCHF (1.23% vs. 2.16%). Also, VO yielded on average 7.91% more per year over the past decade (14.34% vs. 6.43%). The expense ratio of VO is 0.02 percentage points lower than SCHF’s (0.04% vs. 0.06%).
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The Vanguard Mid-Cap Index Fund ETF Shares (VO) has the most exposure to the Technology sector at 22.01%. This is followed by Healthcare and Consumer Cyclical at 13.03% and 12.12% respectively. Basic Materials (3.36%), Energy (3.82%), and Utilities (5.12%) only make up 12.30% of the fund’s total assets.
VO’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Industrials, and Consumer Cyclical stocks at 5.61%, 8.67%, 11.08%, 11.92%, and 12.12%.
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%.
VO is 10.46% more exposed to the Technology sector than SCHF (22.01% vs 11.55%). VO’s exposure to Healthcare and Consumer Cyclical stocks is 1.98% higher and 1.25% higher respectively (13.03% vs. 11.05% and 12.12% vs. 10.87%). In total, Basic Materials, Energy, and Utilities also make up 3.28% less of the fund’s holdings compared to SCHF (12.30% vs. 15.58%).
|IDEXX Laboratories Inc||0.78%|
|Marvell Technology Inc||0.68%|
|IQVIA Holdings Inc||0.68%|
|Chipotle Mexican Grill Inc||0.63%|
|Veeva Systems Inc Class A||0.62%|
|Digital Realty Trust Inc||0.62%|
|Carrier Global Corp Ordinary Shares||0.61%|
VO’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Marvell Technology Inc, IQVIA Holdings Inc, and Chipotle Mexican Grill Inc at 0.78%, 0.75%, 0.68%, 0.68%, and 0.63%.
Veeva Systems Inc Class A (0.62%), Digital Realty Trust Inc (0.62%), and Centene Corp (0.62%) have a slightly smaller but still significant weight. Aptiv PLC and Carrier Global Corp Ordinary Shares are also represented in the VO’s holdings at 0.62% and 0.61%.
|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%|
|Shopify Inc A||0.78%|
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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The Vanguard Mid-Cap Index Fund ETF Shares (VO) has a Standard Deviation of 15.65 with a Alpha of -2.71 and a Beta of 1.11. Its Mean Return is 1.14 while VO’s Sharpe Ratio is 0.83. Furthermore, the fund has a Treynor Ratio of 11.32 and a R-squared of 92.22.
The Schwab International Equity ETF (SCHF) has a Beta of 0.99 with a R-squared of 98.16 and a Mean Return of 0.58. Its Treynor Ratio is 5.39 while SCHF’s Sharpe Ratio is 0.42. Furthermore, the fund has a Alpha of 0.53 and a Standard Deviation of 15.08.
VO’s Mean Return is 0.56 points higher than that of SCHF and its R-squared is 5.94 points lower. With a Standard Deviation of 15.65, VO is slightly more volatile than SCHF. The Alpha and Beta of VO are 3.24 points lower and 0.12 points higher than SCHF’s Alpha and Beta.
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VO had its best year in 2013 with an annual return of 35.15%. VO’s worst year over the past decade yielded -9.21% and occurred in 2018. In most years the Vanguard Mid-Cap Index Fund ETF Shares provided moderate returns such as in 2014, 2012, and 2020 where annual returns amounted to 13.76%, 15.98%, and 18.22% 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VO would have resulted in a final balance of $32,177. This is a profit of $22,177 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.34%.
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%.
VO’s CAGR is 7.91 percentage points higher than that of SCHF and as a result, would have yielded $15,088 more on a $10,000 investment. Thus, VO outperformed SCHF by 7.91% annually.
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