The Vanguard S&P 500 ETF (VOO) and the Schwab U.S. Large-Cap Growth ETF (SCHG) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and SCHG is a Schwab ETFs Large Growth fund. So, what’s the difference between VOO and SCHG? And which fund is better?
The expense ratio of VOO is 0.01 percentage points lower than SCHG’s (0.03% vs. 0.04%). VOO also has a lower exposure to the technology sector and a lower standard deviation. Overall, VOO has provided lower returns than SCHG over the past ten years.
In this article, we’ll compare VOO vs. SCHG. We’ll look at annual returns and performance, as well as at their portfolio growth and holdings. Moreover, I’ll also discuss VOO’s and SCHG’s fund composition, industry exposure, and risk metrics and examine how these affect their overall returns.
|Name||Vanguard S&P 500 ETF||Schwab U.S. Large-Cap Growth ETF|
|Category||Large Blend||Large Growth|
The Vanguard S&P 500 ETF (VOO) is a Large Blend fund that is issued by Vanguard. It currently has 753.41B total assets under management and has yielded an average annual return of 14.45% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.03%.
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%.
VOO’s dividend yield is 0.91% higher than that of SCHG (1.34% vs. 0.43%). Also, VOO yielded on average 3.36% less per year over the past decade (14.45% vs. 17.81%). The expense ratio of VOO is 0.01 percentage points lower than SCHG’s (0.03% vs. 0.04%).
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The Vanguard S&P 500 ETF (VOO) has the most exposure to the Technology sector at 24.24%. This is followed by Financial Services and Healthcare at 14.2% and 13.1% respectively. Utilities (2.43%), Real Estate (2.58%), and Energy (2.84%) only make up 7.85% of the fund’s total assets.
VOO’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 6.32%, 8.86%, 11.14%, 12.01%, and 13.1%.
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%.
VOO is 14.97% less exposed to the Technology sector than SCHG (24.24% vs 39.21%). VOO’s exposure to Financial Services and Healthcare stocks is 6.22% higher and 1.05% higher respectively (14.2% vs. 7.98% and 13.1% vs. 12.05%). In total, Utilities, Real Estate, and Energy also make up 6.01% more of the fund’s holdings compared to SCHG (7.85% vs. 1.84%).
|Facebook Inc Class A||2.29%|
|Alphabet Inc Class A||2.02%|
|Alphabet Inc Class C||1.97%|
|Berkshire Hathaway Inc Class B||1.44%|
|JPMorgan Chase & Co||1.3%|
VOO’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.92%, 5.62%, 4.06%, 2.29%, and 2.02%.
Alphabet Inc Class C (1.97%), Tesla Inc (1.44%), and Berkshire Hathaway Inc Class B (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VOO’s holdings at 1.37% and 1.3%.
|Facebook Inc A||4.45%|
|Alphabet Inc A||3.93%|
|Alphabet Inc Class C||3.82%|
|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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VOO had its best year in 2013 with an annual return of 32.33%. VOO’s worst year over the past decade yielded -4.42% and occurred in 2018. In most years the Vanguard S&P 500 ETF provided moderate returns such as in 2016, 2014, and 2012 where annual returns amounted to 11.93%, 13.63%, and 15.98% 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VOO would have resulted in a final balance of $36,575. This is a profit of $26,575 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.45%.
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%.
VOO’s CAGR is 3.36 percentage points lower than that of SCHG and as a result, would have yielded $10,981 less on a $10,000 investment. Thus, VOO performed worse than SCHG by 3.36% annually.
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