The Vanguard Growth Index Fund ETF Shares (VUG) and the Schwab U.S. Large-Cap ETF (SCHX) are both among the Top 100 ETFs. VUG is a Vanguard Large Growth fund and SCHX is a Schwab ETFs Large Blend fund. So, what’s the difference between VUG and SCHX? And which fund is better?
The expense ratio of VUG is 0.01 percentage points higher than SCHX’s (0.04% vs. 0.03%). VUG also has a higher exposure to the technology sector and a higher standard deviation. Overall, VUG has provided higher returns than SCHX over the past ten years.
In this article, we’ll compare VUG vs. SCHX. We’ll look at holdings and fund composition, as well as at their performance and industry exposure. Moreover, I’ll also discuss VUG’s and SCHX’s annual returns, portfolio growth, and risk metrics and examine how these affect their overall returns.
Summary
| VUG | SCHX | |
| Name | Vanguard Growth Index Fund ETF Shares | Schwab U.S. Large-Cap ETF |
| Category | Large Growth | Large Blend |
| Issuer | Vanguard | Schwab ETFs |
| AUM | 165.53B | 30.89B |
| Avg. Return | 17.58% | 14.60% |
| Div. Yield | 0.57% | 1.41% |
| Expense Ratio | 0.04% | 0.03% |
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 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%.
VUG’s dividend yield is 0.84% lower than that of SCHX (0.57% vs. 1.41%). Also, VUG yielded on average 2.98% more per year over the past decade (17.58% vs. 14.60%). The expense ratio of VUG is 0.01 percentage points higher than SCHX’s (0.04% vs. 0.03%).
Fund Composition
Industry Exposure
| VUG | SCHX | |
| Technology | 39.05% | 25.13% |
| Industrials | 5.13% | 8.65% |
| Energy | 0.32% | 2.72% |
| Communication Services | 16.49% | 11.26% |
| Utilities | 0.0% | 2.37% |
| Healthcare | 8.09% | 13.04% |
| Consumer Defensive | 2.41% | 5.97% |
| Real Estate | 2.46% | 3.13% |
| Financial Services | 6.75% | 13.82% |
| Consumer Cyclical | 17.78% | 11.63% |
| Basic Materials | 1.52% | 2.28% |
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 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%.
VUG is 13.92% more exposed to the Technology sector than SCHX (39.05% vs 25.13%). VUG’s exposure to Consumer Cyclical and Communication Services stocks is 6.15% higher and 5.23% higher respectively (17.78% vs. 11.63% and 16.49% vs. 11.26%). In total, Energy, Basic Materials, and Consumer Defensive also make up 6.72% less of the fund’s holdings compared to SCHX (4.25% vs. 10.97%).
Holdings
| VUG Holdings | Weight |
| Apple Inc | 10.13% |
| Microsoft Corp | 9.52% |
| Amazon.com Inc | 6.88% |
| Facebook Inc Class A | 3.89% |
| Alphabet Inc Class A | 3.43% |
| Alphabet Inc Class C | 3.22% |
| Tesla Inc | 2.44% |
| NVIDIA Corp | 2.21% |
| 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%.
| 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
| VUG | SCHX | |
| Mean Return | 1.44 | 1.24 |
| R-squared | 92.48 | 99.83 |
| Std. Deviation | 14.76 | 13.8 |
| Alpha | 1.81 | -0.14 |
| Beta | 1.04 | 1.02 |
| Sharpe Ratio | 1.13 | 1.03 |
| Treynor Ratio | 16.13 | 14.06 |
The Vanguard Growth Index Fund ETF Shares (VUG) has a Treynor Ratio of 16.13 with a Standard Deviation of 14.76 and a Beta of 1.04. Its Alpha is 1.81 while VUG’s Sharpe Ratio is 1.13. Furthermore, the fund has a R-squared of 92.48 and a Mean Return of 1.44.
The Schwab U.S. Large-Cap ETF (SCHX) has a Treynor Ratio of 14.06 with a Alpha of -0.14 and a Sharpe Ratio of 1.03. Its Mean Return is 1.24 while SCHX’s Standard Deviation is 13.8. Furthermore, the fund has a R-squared of 99.83 and a Beta of 1.02.
VUG’s Mean Return is 0.20 points higher than that of SCHX and its R-squared is 7.35 points lower. With a Standard Deviation of 14.76, VUG is slightly more volatile than SCHX. The Alpha and Beta of VUG are 1.95 points higher and 0.02 points higher than SCHX’s Alpha and Beta.
Performance
Annual Returns
| Year | VUG | SCHX |
| 2020 | 40.16% | 20.9% |
| 2019 | 37.26% | 31.4% |
| 2018 | -3.32% | -4.52% |
| 2017 | 27.8% | 21.91% |
| 2016 | 6.13% | 11.78% |
| 2015 | 3.32% | 1.02% |
| 2014 | 13.62% | 13.33% |
| 2013 | 32.38% | 32.54% |
| 2012 | 17.03% | 16.06% |
| 2011 | 1.87% | 1.61% |
| 2010 | 17.11% | 15.88% |
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 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 |
| VUG | $10,000 | $46,738 | 17.58% |
| SCHX | $10,000 | $36,987 | 14.60% |
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 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%.
VUG’s CAGR is 2.98 percentage points higher than that of SCHX and as a result, would have yielded $9,751 more on a $10,000 investment. Thus, VUG outperformed SCHX by 2.98% annually.
