The Vanguard Total World Stock Index Fund ETF Shares (VT) and the Schwab U.S. Large-Cap Growth ETF (SCHG) are both among the Top 100 ETFs. VT is a Vanguard N/A fund and SCHG is a Schwab ETFs Large Growth fund. So, what’s the difference between VT and SCHG? And which fund is better?
The expense ratio of VT is 0.04 percentage points higher than SCHG’s (0.08% vs. 0.04%). VT also has a lower exposure to the technology sector and a lower standard deviation. Overall, VT has provided lower returns than SCHG over the past 10 years.
In this article, we’ll compare VT vs. SCHG. We’ll look at fund composition and holdings, as well as at their risk metrics and portfolio growth. Moreover, I’ll also discuss VT’s and SCHG’s industry exposure, performance, and annual returns and examine how these affect their overall returns.
|Name||Vanguard Total World Stock Index Fund ETF Shares||Schwab U.S. Large-Cap Growth ETF|
The Vanguard Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.
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%.
VT’s dividend yield is 1.22% higher than that of SCHG (1.65% vs. 0.43%). Also, VT yielded on average 7.39% less per year over the past decade (10.42% vs. 17.81%). The expense ratio of VT is 0.04 percentage points higher than SCHG’s (0.08% vs. 0.04%).
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The Vanguard Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.
VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.
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%.
VT is 19.58% less exposed to the Technology sector than SCHG (19.63% vs 39.21%). VT’s exposure to Financial Services and Consumer Cyclical stocks is 7.38% higher and 2.69% lower respectively (15.36% vs. 7.98% and 12.32% vs. 15.01%). In total, Energy, Real Estate, and Basic Materials also make up 8.57% more of the fund’s holdings compared to SCHG (12.09% vs. 3.52%).
|Facebook Inc Class A||1.1%|
|Alphabet Inc Class A||0.97%|
|Alphabet Inc Class C||0.95%|
|JPMorgan Chase & Co||0.62%|
|Tencent Holdings Ltd||0.6%|
VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.
Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.
|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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The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Standard Deviation of 14.19 with a Sharpe Ratio of 0.71 and a Mean Return of 0.9. Its R-squared is 99.35 while VT’s Beta is 1.01. Furthermore, the fund has a Alpha of 0.2 and a Treynor Ratio of 9.5.
The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Treynor Ratio of 16.3 with a Mean Return of 1.46 and a Standard Deviation of 14.78. Its Beta is 1.05 while SCHG’s R-squared is 92.92. Furthermore, the fund has a Alpha of 1.97 and a Sharpe Ratio of 1.14.
VT’s Mean Return is 0.56 points lower than that of SCHG and its R-squared is 6.43 points higher. With a Standard Deviation of 14.19, VT is slightly less volatile than SCHG. The Alpha and Beta of VT are 1.77 points lower and 0.04 points lower than SCHG’s Alpha and Beta.
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VT had its best year in 2019 with an annual return of 26.8%. VT’s worst year over the past decade yielded -9.67% and occurred in 2018. In most years the Vanguard Total World Stock Index Fund ETF Shares provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to 8.77%, 13.05%, and 16.74% 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 VT would have resulted in a final balance of $24,537. This is a profit of $14,537 over 10 years and amounts to a compound annual growth rate (CAGR) of 10.42%.
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%.
VT’s CAGR is 7.39 percentage points lower than that of SCHG and as a result, would have yielded $23,019 less on a $10,000 investment. Thus, VT performed worse than SCHG by 7.39% annually.
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