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VTV vs. SCHD: What’s The Difference?

The Vanguard Value Index Fund ETF Shares (VTV) and the Schwab U.S. Dividend Equity ETF (SCHD) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and SCHD is a Schwab ETFs Large Value fund. So, what’s the difference between VTV and SCHD? And which fund is better?

The expense ratio of VTV is 0.02 percentage points lower than SCHD’s (0.04% vs. 0.06%). VTV also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VTV has provided lower returns than SCHD over the past ten years.

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

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Summary

VTVSCHD
NameVanguard Value Index Fund ETF SharesSchwab U.S. Dividend Equity ETF
CategoryLarge ValueLarge Value
IssuerVanguardSchwab ETFs
AUM125.77B26B
Avg. Return12.07%14.80%
Div. Yield2.15%2.89%
Expense Ratio0.04%0.06%

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. Dividend Equity ETF (SCHD) is a Large Value fund that is issued by Schwab ETFs. It currently has 26B total assets under management and has yielded an average annual return of 14.80% over the past 10 years. The fund has a dividend yield of 2.89% with an expense ratio of 0.06%.

VTV’s dividend yield is 0.74% lower than that of SCHD (2.15% vs. 2.89%). Also, VTV yielded on average 2.73% less per year over the past decade (12.07% vs. 14.80%). The expense ratio of VTV is 0.02 percentage points lower than SCHD’s (0.04% vs. 0.06%).

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Fund Composition

Industry Exposure

VTV vs. SCHD - Industry Exposure

VTVSCHD
Technology7.86%16.26%
Industrials12.61%18.05%
Energy5.59%1.87%
Communication Services5.49%4.96%
Utilities5.37%0.0%
Healthcare19.84%12.64%
Consumer Defensive10.72%14.04%
Real Estate3.01%0.0%
Financial Services22.81%21.69%
Consumer Cyclical3.79%8.36%
Basic Materials2.91%2.13%

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. Dividend Equity ETF (SCHD) has the most exposure to the Financial Services sector at 21.69%. This is followed by Industrials and Technology at 18.05% and 16.26% respectively. Utilities (0.0%), Energy (1.87%), and Basic Materials (2.13%) only make up 4.00% of the fund’s total assets.

SCHD’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Healthcare, Consumer Defensive, and Technology stocks at 4.96%, 8.36%, 12.64%, 14.04%, and 16.26%.

VTV is 1.12% more exposed to the Financial Services sector than SCHD (22.81% vs 21.69%). VTV’s exposure to Healthcare and Industrials stocks is 7.20% higher and 5.44% lower respectively (19.84% vs. 12.64% and 12.61% vs. 18.05%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 3.81% more of the fund’s holdings compared to SCHD (12.17% vs. 8.36%).

Holdings

VTV - Holdings

VTV HoldingsWeight
Berkshire Hathaway Inc Class B2.98%
JPMorgan Chase & Co2.82%
Johnson & Johnson2.6%
UnitedHealth Group Inc2.27%
Procter & Gamble Co1.98%
Bank of America Corp1.91%
Exxon Mobil Corp1.6%
Comcast Corp Class A1.57%
Intel Corp1.36%
Verizon Communications Inc1.32%

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%.

SCHD - Holdings

SCHD HoldingsWeight
Merck & Co Inc4.24%
The Home Depot Inc4.19%
Texas Instruments Inc4.16%
Broadcom Inc4.15%
Amgen Inc4.11%
PepsiCo Inc4.09%
BlackRock Inc4.05%
Pfizer Inc3.97%
Verizon Communications Inc3.96%
Cisco Systems Inc3.96%

SCHD’s Top Holdings are Merck & Co Inc, The Home Depot Inc, Texas Instruments Inc, Broadcom Inc, and Amgen Inc at 4.24%, 4.19%, 4.16%, 4.15%, and 4.11%.

PepsiCo Inc (4.09%), BlackRock Inc (4.05%), and Pfizer Inc (3.97%) have a slightly smaller but still significant weight. Verizon Communications Inc and Cisco Systems Inc are also represented in the SCHD’s holdings at 3.96% and 3.96%.

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Risk Analysis

VTVSCHD
Mean Return1.050
R-squared92.610
Std. Deviation13.780
Alpha-1.920
Beta0.980
Sharpe Ratio0.870
Treynor Ratio11.940

The Vanguard Value Index Fund ETF Shares (VTV) has a Sharpe Ratio of 0.87 with a R-squared of 92.61 and a Beta of 0.98. Its Standard Deviation is 13.78 while VTV’s Treynor Ratio is 11.94. Furthermore, the fund has a Alpha of -1.92 and a Mean Return of 1.05.

The Schwab U.S. Dividend Equity ETF (SCHD) has a Treynor Ratio of 0 with a Alpha of 0 and a Standard Deviation of 0. Its Sharpe Ratio is 0 while SCHD’s Mean Return is 0. Furthermore, the fund has a Beta of 0 and a R-squared of 0.

VTV’s Mean Return is 1.05 points higher than that of SCHD and its R-squared is 92.61 points higher. With a Standard Deviation of 13.78, VTV is slightly more volatile than SCHD. The Alpha and Beta of VTV are 1.92 points lower and 0.98 points higher than SCHD’s Alpha and Beta.

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Performance

Annual Returns

VTV vs. SCHD - Annual Returns

YearVTVSCHD
20202.23%15.11%
201925.85%27.28%
2018-5.39%-5.46%
201717.12%20.88%
201616.88%16.25%
2015-0.89%-0.21%
201413.19%11.66%
201333.03%32.9%
201215.19%11.4%
20111.16%0.0%
201014.45%0.0%

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 SCHD, returning 32.9% on an annual basis. The poorest year for SCHD in the last ten years was 2018, with a yield of -5.46%. Most years the Schwab U.S. Dividend Equity ETF has given investors modest returns, such as in 2012, 2014, and 2020, when gains were 11.4%, 11.66%, and 15.11% respectively.

Portfolio Growth

VTV vs. SCHD - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VTV$10,000$24,86612.07%
SCHD$10,000$28,82314.80%

A $10,000 investment in VTV would have resulted in a final balance of $24,866. This is a profit of $14,866 over 8 years and amounts to a compound annual growth rate (CAGR) of 12.07%.

With a $10,000 investment in SCHD, the end total would have been $28,823. This equates to a $18,823 profit over 8 years and a compound annual growth rate (CAGR) of 14.80%.

VTV’s CAGR is 2.73 percentage points lower than that of SCHD and as a result, would have yielded $3,957 less on a $10,000 investment. Thus, VTV performed worse than SCHD by 2.73% annually.


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