The Vanguard Value Index Fund ETF Shares (VTV) and the Schwab U.S. Large-Cap ETF (SCHX) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and SCHX is a Schwab ETFs Large Blend fund. So, what’s the difference between VTV and SCHX? And which fund is better?
The expense ratio of VTV is 0.01 percentage points higher than SCHX’s (0.04% vs. 0.03%). VTV also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VTV has provided lower returns than SCHX over the past ten years.
In this article, we’ll compare VTV vs. SCHX. We’ll look at annual returns and portfolio growth, as well as at their fund composition and holdings. Moreover, I’ll also discuss VTV’s and SCHX’s risk metrics, performance, and industry exposure and examine how these affect their overall returns.
Summary
| VTV | SCHX | |
| Name | Vanguard Value Index Fund ETF Shares | Schwab U.S. Large-Cap ETF |
| Category | Large Value | Large Blend |
| Issuer | Vanguard | Schwab ETFs |
| AUM | 125.77B | 30.89B |
| Avg. Return | 12.07% | 14.60% |
| Div. Yield | 2.15% | 1.41% |
| Expense Ratio | 0.04% | 0.03% |
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. Large-Cap ETF (SCHX) is a Large Blend fund that is issued by Schwab ETFs. It currently has 30.89B total assets under management and has yielded an average annual return of 14.60% over the past 10 years. The fund has a dividend yield of 1.41% with an expense ratio of 0.03%.
VTV’s dividend yield is 0.74% higher than that of SCHX (2.15% vs. 1.41%). Also, VTV yielded on average 2.53% less per year over the past decade (12.07% vs. 14.60%). The expense ratio of VTV is 0.01 percentage points higher than SCHX’s (0.04% vs. 0.03%).
Fund Composition
Industry Exposure
| VTV | SCHX | |
| Technology | 7.86% | 25.13% |
| Industrials | 12.61% | 8.65% |
| Energy | 5.59% | 2.72% |
| Communication Services | 5.49% | 11.26% |
| Utilities | 5.37% | 2.37% |
| Healthcare | 19.84% | 13.04% |
| Consumer Defensive | 10.72% | 5.97% |
| Real Estate | 3.01% | 3.13% |
| Financial Services | 22.81% | 13.82% |
| Consumer Cyclical | 3.79% | 11.63% |
| Basic Materials | 2.91% | 2.28% |
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. Large-Cap ETF (SCHX) has the most exposure to the Technology sector at 25.13%. This is followed by Financial Services and Healthcare at 13.82% and 13.04% respectively. Utilities (2.37%), Energy (2.72%), and Real Estate (3.13%) only make up 8.22% of the fund’s total assets.
SCHX’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.65%, 11.26%, 11.63%, and 13.04%.
VTV is 8.99% more exposed to the Financial Services sector than SCHX (22.81% vs 13.82%). VTV’s exposure to Healthcare and Industrials stocks is 6.80% higher and 3.96% higher respectively (19.84% vs. 13.04% and 12.61% vs. 8.65%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 4.96% less of the fund’s holdings compared to SCHX (12.17% vs. 17.13%).
Holdings
| VTV Holdings | Weight |
| 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% |
| Intel Corp | 1.36% |
| 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%.
| SCHX Holdings | Weight |
| Apple Inc | 5.37% |
| Microsoft Corp | 5.1% |
| Amazon.com Inc | 3.69% |
| Facebook Inc A | 2.08% |
| Alphabet Inc A | 1.84% |
| Alphabet Inc Class C | 1.78% |
| Berkshire Hathaway Inc Class B | 1.32% |
| Tesla Inc | 1.31% |
| NVIDIA Corp | 1.25% |
| JPMorgan Chase & Co | 1.18% |
SCHX’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 5.37%, 5.1%, 3.69%, 2.08%, and 1.84%.
Alphabet Inc Class C (1.78%), Berkshire Hathaway Inc Class B (1.32%), and Tesla Inc (1.31%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHX’s holdings at 1.25% and 1.18%.
Risk Analysis
| VTV | SCHX | |
| Mean Return | 1.05 | 1.24 |
| R-squared | 92.61 | 99.83 |
| Std. Deviation | 13.78 | 13.8 |
| Alpha | -1.92 | -0.14 |
| Beta | 0.98 | 1.02 |
| Sharpe Ratio | 0.87 | 1.03 |
| Treynor Ratio | 11.94 | 14.06 |
The Vanguard Value Index Fund ETF Shares (VTV) has a Mean Return of 1.05 with a R-squared of 92.61 and a Standard Deviation of 13.78. Its Sharpe Ratio is 0.87 while VTV’s Beta is 0.98. Furthermore, the fund has a Treynor Ratio of 11.94 and a Alpha of -1.92.
The Schwab U.S. Large-Cap ETF (SCHX) has a Treynor Ratio of 14.06 with a R-squared of 99.83 and a Standard Deviation of 13.8. Its Sharpe Ratio is 1.03 while SCHX’s Alpha is -0.14. Furthermore, the fund has a Beta of 1.02 and a Mean Return of 1.24.
VTV’s Mean Return is 0.19 points lower than that of SCHX and its R-squared is 7.22 points lower. With a Standard Deviation of 13.78, VTV is slightly less volatile than SCHX. The Alpha and Beta of VTV are 1.78 points lower and 0.04 points lower than SCHX’s Alpha and Beta.
Performance
Annual Returns
| Year | VTV | SCHX |
| 2020 | 2.23% | 20.9% |
| 2019 | 25.85% | 31.4% |
| 2018 | -5.39% | -4.52% |
| 2017 | 17.12% | 21.91% |
| 2016 | 16.88% | 11.78% |
| 2015 | -0.89% | 1.02% |
| 2014 | 13.19% | 13.33% |
| 2013 | 33.03% | 32.54% |
| 2012 | 15.19% | 16.06% |
| 2011 | 1.16% | 1.61% |
| 2010 | 14.45% | 15.88% |
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 SCHX, returning 32.54% on an annual basis. The poorest year for SCHX in the last ten years was 2018, with a yield of -4.52%. Most years the Schwab U.S. Large-Cap ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.33%, 15.88%, and 16.06% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VTV | $10,000 | $28,976 | 12.07% |
| SCHX | $10,000 | $36,987 | 14.60% |
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 SCHX, the end total would have been $36,987. This equates to a $26,987 profit over 10 years and a compound annual growth rate (CAGR) of 14.60%.
VTV’s CAGR is 2.53 percentage points lower than that of SCHX and as a result, would have yielded $8,011 less on a $10,000 investment. Thus, VTV performed worse than SCHX by 2.53% annually.
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