Skip to content

VO vs. SCHG: What’s The Difference?

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

VO and SCHG have the same expense ratio: 0.04%. VO also has a lower exposure to the technology sector and a higher standard deviation. Overall, VO has provided lower returns than SCHG over the past ten years.

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

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

VOSCHG
NameVanguard Mid-Cap Index Fund ETF SharesSchwab U.S. Large-Cap Growth ETF
CategoryMid-Cap BlendLarge Growth
IssuerVanguardSchwab ETFs
AUM154.08B15.16B
Avg. Return14.34%17.81%
Div. Yield1.23%0.43%
Expense Ratio0.04%0.04%

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 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%.

VO’s dividend yield is 0.80% higher than that of SCHG (1.23% vs. 0.43%). Also, VO yielded on average 3.47% less per year over the past decade (14.34% vs. 17.81%). VO and SCHG have the same expense ratio: 0.04%.

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

VO vs. SCHG - Industry Exposure

VOSCHG
Technology22.01%39.21%
Industrials11.92%3.01%
Energy3.82%0.2%
Communication Services5.61%17.07%
Utilities5.12%0.0%
Healthcare13.03%12.05%
Consumer Defensive3.25%2.15%
Real Estate8.67%1.64%
Financial Services11.08%7.98%
Consumer Cyclical12.12%15.01%
Basic Materials3.36%1.68%

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 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%.

VO is 17.20% less exposed to the Technology sector than SCHG (22.01% vs 39.21%). VO’s exposure to Healthcare and Consumer Cyclical stocks is 0.98% higher and 2.89% lower respectively (13.03% vs. 12.05% and 12.12% vs. 15.01%). In total, Basic Materials, Energy, and Utilities also make up 10.42% more of the fund’s holdings compared to SCHG (12.30% vs. 1.88%).

Holdings

VO - Holdings

VO HoldingsWeight
IDEXX Laboratories Inc0.78%
DocuSign Inc0.75%
Marvell Technology Inc0.68%
IQVIA Holdings Inc0.68%
Chipotle Mexican Grill Inc0.63%
Veeva Systems Inc Class A0.62%
Digital Realty Trust Inc0.62%
Centene Corp0.62%
Aptiv PLC0.62%
Carrier Global Corp Ordinary Shares0.61%

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%.

SCHG - Holdings

SCHG HoldingsWeight
Apple Inc11.49%
Microsoft Corp10.91%
Amazon.com Inc7.89%
Facebook Inc A4.45%
Alphabet Inc A3.93%
Alphabet Inc Class C3.82%
Tesla Inc2.8%
NVIDIA Corp2.67%
Visa Inc Class A2.12%
UnitedHealth Group Inc2.02%

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%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

VOSCHG
Mean Return1.141.46
R-squared92.2292.92
Std. Deviation15.6514.78
Alpha-2.711.97
Beta1.111.05
Sharpe Ratio0.831.14
Treynor Ratio11.3216.3

The Vanguard Mid-Cap Index Fund ETF Shares (VO) has a Alpha of -2.71 with a Mean Return of 1.14 and a Beta of 1.11. Its Treynor Ratio is 11.32 while VO’s Sharpe Ratio is 0.83. Furthermore, the fund has a Standard Deviation of 15.65 and a R-squared of 92.22.

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

VO’s Mean Return is 0.32 points lower than that of SCHG and its R-squared is 0.70 points lower. With a Standard Deviation of 15.65, VO is slightly more volatile than SCHG. The Alpha and Beta of VO are 4.68 points lower and 0.06 points higher than SCHG’s Alpha and Beta.

FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!

Performance

Annual Returns

VO vs. SCHG - Annual Returns

YearVOSCHG
202018.22%39.13%
201931.04%36.21%
2018-9.21%-1.35%
201719.25%28.04%
201611.23%6.76%
2015-1.34%3.26%
201413.76%15.74%
201335.15%33.96%
201215.98%17.02%
2011-1.96%-0.67%
201025.57%16.83%

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 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

VO vs. SCHG - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VO$10,000$32,17714.34%
SCHG$10,000$47,55617.81%

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 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%.

VO’s CAGR is 3.47 percentage points lower than that of SCHG and as a result, would have yielded $15,379 less on a $10,000 investment. Thus, VO performed worse than SCHG by 3.47% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!

2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.

5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply

Your email address will not be published.