The Vanguard Value Index Fund ETF Shares (VTV) and the Schwab U.S. Small-Cap ETF (SCHA) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and SCHA is a Schwab ETFs Small Blend fund. So, what’s the difference between VTV and SCHA? And which fund is better?
VTV and SCHA have the same expense ratio: 0.04%. VTV also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VTV has provided lower returns than SCHA over the past ten years.
In this article, we’ll compare VTV vs. SCHA. We’ll look at annual returns and performance, as well as at their industry exposure and portfolio growth. Moreover, I’ll also discuss VTV’s and SCHA’s fund composition, holdings, and risk metrics and examine how these affect their overall returns.
|Name||Vanguard Value Index Fund ETF Shares||Schwab U.S. Small-Cap ETF|
|Category||Large Value||Small Blend|
The Vanguard Value Index Fund ETF Shares (VTV) is a Large Value fund that is issued by Vanguard. It currently has 125.77B total assets under management and has yielded an average annual return of 12.07% over the past 10 years. The fund has a dividend yield of 2.15% with an expense ratio of 0.04%.
The Schwab U.S. Small-Cap ETF (SCHA) is a Small Blend fund that is issued by Schwab ETFs. It currently has 16.51B total assets under management and has yielded an average annual return of 12.62% over the past 10 years. The fund has a dividend yield of 0.98% with an expense ratio of 0.04%.
VTV’s dividend yield is 1.17% higher than that of SCHA (2.15% vs. 0.98%). Also, VTV yielded on average 0.55% less per year over the past decade (12.07% vs. 12.62%). VTV and SCHA have the same expense ratio: 0.04%.
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The Vanguard Value Index Fund ETF Shares (VTV) has the most exposure to the Financial Services sector at 22.81%. This is followed by Healthcare and Industrials at 19.84% and 12.61% respectively. Real Estate (3.01%), Consumer Cyclical (3.79%), and Utilities (5.37%) only make up 12.17% of the fund’s total assets.
VTV’s mid-section with moderate exposure is comprised of Communication Services, Energy, Technology, Consumer Defensive, and Industrials stocks at 5.49%, 5.59%, 7.86%, 10.72%, and 12.61%.
The Schwab U.S. Small-Cap ETF (SCHA) has the most exposure to the Healthcare sector at 16.5%. This is followed by Industrials and Technology at 15.37% and 14.91% respectively. Energy (3.35%), Communication Services (3.5%), and Consumer Defensive (3.75%) only make up 10.60% of the fund’s total assets.
SCHA’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Technology stocks at 3.98%, 7.83%, 14.48%, 14.49%, and 14.91%.
VTV is 8.32% more exposed to the Financial Services sector than SCHA (22.81% vs 14.49%). VTV’s exposure to Healthcare and Industrials stocks is 3.34% higher and 2.76% lower respectively (19.84% vs. 16.5% and 12.61% vs. 15.37%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 11.97% less of the fund’s holdings compared to SCHA (12.17% vs. 24.14%).
|Berkshire Hathaway Inc Class B||2.98%|
|JPMorgan Chase & Co||2.82%|
|Johnson & Johnson||2.6%|
|UnitedHealth Group Inc||2.27%|
|Procter & Gamble Co||1.98%|
|Bank of America Corp||1.91%|
|Exxon Mobil Corp||1.6%|
|Comcast Corp Class A||1.57%|
|Verizon Communications Inc||1.32%|
VTV’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.98%, 2.82%, 2.6%, 2.27%, and 1.98%.
Bank of America Corp (1.91%), Exxon Mobil Corp (1.6%), and Comcast Corp Class A (1.57%) have a slightly smaller but still significant weight. Intel Corp and Verizon Communications Inc are also represented in the VTV’s holdings at 1.36% and 1.32%.
|AMC Entertainment Holdings Inc Class A||0.67%|
|Caesars Entertainment Inc||0.51%|
|Plug Power Inc||0.41%|
|10x Genomics Inc Ordinary Shares – Class A||0.34%|
|GameStop Corp Class A||0.28%|
|Penn National Gaming Inc||0.27%|
|Axon Enterprise Inc||0.27%|
SCHA’s Top Holdings are AMC Entertainment Holdings Inc Class A, Caesars Entertainment Inc, Cloudflare Inc, NovoCure Ltd, and Plug Power Inc at 0.67%, 0.51%, 0.48%, 0.45%, and 0.41%.
10x Genomics Inc Ordinary Shares – Class A (0.34%), GameStop Corp Class A (0.28%), and RH (0.27%) have a slightly smaller but still significant weight. Penn National Gaming Inc and Axon Enterprise Inc are also represented in the SCHA’s holdings at 0.27% and 0.27%.
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The Vanguard Value Index Fund ETF Shares (VTV) has a Treynor Ratio of 11.94 with a Beta of 0.98 and a Alpha of -1.92. Its Mean Return is 1.05 while VTV’s Standard Deviation is 13.78. Furthermore, the fund has a R-squared of 92.61 and a Sharpe Ratio of 0.87.
The Schwab U.S. Small-Cap ETF (SCHA) has a Standard Deviation of 18.68 with a Treynor Ratio of 9.62 and a Sharpe Ratio of 0.7. Its Mean Return is 1.14 while SCHA’s R-squared is 82.26. Furthermore, the fund has a Alpha of -4.65 and a Beta of 1.25.
VTV’s Mean Return is 0.09 points lower than that of SCHA and its R-squared is 10.35 points higher. With a Standard Deviation of 13.78, VTV is slightly less volatile than SCHA. The Alpha and Beta of VTV are 2.73 points higher and 0.27 points lower than SCHA’s Alpha and Beta.
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VTV had its best year in 2013 with an annual return of 33.03%. VTV’s worst year over the past decade yielded -5.39% and occurred in 2018. In most years the Vanguard Value Index Fund ETF Shares provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.19%, 14.45%, and 15.19% respectively.
The year 2013 was the strongest year for SCHA, returning 39.59% on an annual basis. The poorest year for SCHA in the last ten years was 2018, with a yield of -11.75%. Most years the Schwab U.S. Small-Cap ETF has given investors modest returns, such as in 2017, 2012, and 2020, when gains were 15.04%, 18.24%, and 19.35% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VTV would have resulted in a final balance of $28,976. This is a profit of $18,976 over 10 years and amounts to a compound annual growth rate (CAGR) of 12.07%.
With a $10,000 investment in SCHA, the end total would have been $30,035. This equates to a $20,035 profit over 10 years and a compound annual growth rate (CAGR) of 12.62%.
VTV’s CAGR is 0.55 percentage points lower than that of SCHA and as a result, would have yielded $1,059 less on a $10,000 investment. Thus, VTV performed worse than SCHA by 0.55% annually.
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