The Vanguard Growth Index Fund ETF Shares (VUG) and the Schwab International Equity ETF (SCHF) are both among the Top 100 ETFs. VUG is a Vanguard Large Growth fund and SCHF is a Schwab ETFs Foreign Large Blend fund. So, what’s the difference between VUG and SCHF? And which fund is better?
The expense ratio of VUG is 0.02 percentage points lower than SCHF’s (0.04% vs. 0.06%). VUG also has a higher exposure to the technology sector and a lower standard deviation. Overall, VUG has provided higher returns than SCHF over the past ten years.
In this article, we’ll compare VUG vs. SCHF. We’ll look at portfolio growth and holdings, as well as at their fund composition and annual returns. Moreover, I’ll also discuss VUG’s and SCHF’s performance, risk metrics, and industry exposure and examine how these affect their overall returns.
|Name||Vanguard Growth Index Fund ETF Shares||Schwab International Equity ETF|
|Category||Large Growth||Foreign Large Blend|
The Vanguard Growth Index Fund ETF Shares (VUG) is a Large Growth fund that is issued by Vanguard. It currently has 165.53B total assets under management and has yielded an average annual return of 17.58% over the past 10 years. The fund has a dividend yield of 0.57% with an expense ratio of 0.04%.
The Schwab International Equity ETF (SCHF) is a Foreign Large Blend fund that is issued by Schwab ETFs. It currently has 26.99B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 2.16% with an expense ratio of 0.06%.
VUG’s dividend yield is 1.59% lower than that of SCHF (0.57% vs. 2.16%). Also, VUG yielded on average 11.15% more per year over the past decade (17.58% vs. 6.43%). The expense ratio of VUG is 0.02 percentage points lower than SCHF’s (0.04% vs. 0.06%).
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The Vanguard Growth Index Fund ETF Shares (VUG) has the most exposure to the Technology sector at 39.05%. This is followed by Consumer Cyclical and Communication Services at 17.78% and 16.49% respectively. Energy (0.32%), Basic Materials (1.52%), and Consumer Defensive (2.41%) only make up 4.25% of the fund’s total assets.
VUG’s mid-section with moderate exposure is comprised of Real Estate, Industrials, Financial Services, Healthcare, and Communication Services stocks at 2.46%, 5.13%, 6.75%, 8.09%, and 16.49%.
The Schwab International Equity ETF (SCHF) has the most exposure to the Financial Services sector at 17.85%. This is followed by Industrials and Technology at 14.86% and 11.55% respectively. Real Estate (3.17%), Energy (4.23%), and Communication Services (5.65%) only make up 13.05% of the fund’s total assets.
SCHF’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Consumer Cyclical, Healthcare, and Technology stocks at 8.26%, 9.41%, 10.87%, 11.05%, and 11.55%.
VUG is 27.50% more exposed to the Technology sector than SCHF (39.05% vs 11.55%). VUG’s exposure to Consumer Cyclical and Communication Services stocks is 6.91% higher and 10.84% higher respectively (17.78% vs. 10.87% and 16.49% vs. 5.65%). In total, Energy, Basic Materials, and Consumer Defensive also make up 17.65% less of the fund’s holdings compared to SCHF (4.25% vs. 21.90%).
|Facebook Inc Class A||3.89%|
|Alphabet Inc Class A||3.43%|
|Alphabet Inc Class C||3.22%|
|Visa Inc Class A||1.78%|
|PayPal Holdings Inc||1.6%|
VUG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.13%, 9.52%, 6.88%, 3.89%, and 3.43%.
Alphabet Inc Class C (3.22%), Tesla Inc (2.44%), and NVIDIA Corp (2.21%) have a slightly smaller but still significant weight. Visa Inc Class A and PayPal Holdings Inc are also represented in the VUG’s holdings at 1.78% and 1.6%.
|Samsung Electronics Co Ltd||1.6%|
|ASML Holding NV||1.29%|
|Roche Holding AG||1.24%|
|Toyota Motor Corp||1.02%|
|LVMH Moet Hennessy Louis Vuitton SE||0.93%|
|Shopify Inc A||0.78%|
SCHF’s Top Holdings are Nestle SA, Samsung Electronics Co Ltd, ASML Holding NV, Roche Holding AG, and Toyota Motor Corp at 1.66%, 1.6%, 1.29%, 1.24%, and 1.02%.
LVMH Moet Hennessy Louis Vuitton SE (0.93%), Novartis AG (0.92%), and Shopify Inc A (0.78%) have a slightly smaller but still significant weight. AstraZeneca PLC and SAP SE are also represented in the SCHF’s holdings at 0.75% and 0.74%.
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The Vanguard Growth Index Fund ETF Shares (VUG) has a Alpha of 1.81 with a R-squared of 92.48 and a Sharpe Ratio of 1.13. Its Beta is 1.04 while VUG’s Treynor Ratio is 16.13. Furthermore, the fund has a Mean Return of 1.44 and a Standard Deviation of 14.76.
The Schwab International Equity ETF (SCHF) has a Treynor Ratio of 5.39 with a Sharpe Ratio of 0.42 and a Mean Return of 0.58. Its Alpha is 0.53 while SCHF’s Beta is 0.99. Furthermore, the fund has a R-squared of 98.16 and a Standard Deviation of 15.08.
VUG’s Mean Return is 0.86 points higher than that of SCHF and its R-squared is 5.68 points lower. With a Standard Deviation of 14.76, VUG is slightly less volatile than SCHF. The Alpha and Beta of VUG are 1.28 points higher and 0.05 points higher than SCHF’s Alpha and Beta.
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VUG had its best year in 2020 with an annual return of 40.16%. VUG’s worst year over the past decade yielded -3.32% and occurred in 2018. In most years the Vanguard Growth Index Fund ETF Shares provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.62%, 17.03%, and 17.11% respectively.
The year 2017 was the strongest year for SCHF, returning 25.83% on an annual basis. The poorest year for SCHF in the last ten years was 2018, with a yield of -14.39%. Most years the Schwab International Equity ETF has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 2.88%, 8.6%, and 9.86% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VUG would have resulted in a final balance of $46,738. This is a profit of $36,738 over 10 years and amounts to a compound annual growth rate (CAGR) of 17.58%.
With a $10,000 investment in SCHF, the end total would have been $17,089. This equates to a $7,089 profit over 10 years and a compound annual growth rate (CAGR) of 6.43%.
VUG’s CAGR is 11.15 percentage points higher than that of SCHF and as a result, would have yielded $29,649 more on a $10,000 investment. Thus, VUG outperformed SCHF by 11.15% annually.
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