The Vanguard Extended Market Index Fund ETF Shares (VXF) and the Schwab U.S. Small-Cap ETF (SCHA) are both among the Top 100 ETFs. VXF is a Vanguard Mid-Cap Growth fund and SCHA is a Schwab ETFs Small Blend fund. So, what’s the difference between VXF and SCHA? And which fund is better?
The expense ratio of VXF is 0.02 percentage points higher than SCHA’s (0.06% vs. 0.04%). VXF also has a higher exposure to the technology sector and a lower standard deviation. Overall, VXF has provided higher returns than SCHA over the past 10 years.
In this article, we’ll compare VXF vs. SCHA. We’ll look at holdings and industry exposure, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss VXF’s and SCHA’s performance, fund composition, and risk metrics and examine how these affect their overall returns.
|Name||Vanguard Extended Market Index Fund ETF Shares||Schwab U.S. Small-Cap ETF|
|Category||Mid-Cap Growth||Small Blend|
The Vanguard Extended Market Index Fund ETF Shares (VXF) is a Mid-Cap Growth fund that is issued by Vanguard. It currently has 114.53B total assets under management and has yielded an average annual return of 15.47% over the past 10 years. The fund has a dividend yield of 1.19% with an expense ratio of 0.06%.
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%.
VXF’s dividend yield is 0.21% higher than that of SCHA (1.19% vs. 0.98%). Also, VXF yielded on average 2.85% more per year over the past decade (15.47% vs. 12.62%). The expense ratio of VXF is 0.02 percentage points higher than SCHA’s (0.06% vs. 0.04%).
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The Vanguard Extended Market Index Fund ETF Shares (VXF) has the most exposure to the Technology sector at 23.61%. This is followed by Healthcare and Financial Services at 15.25% and 12.56% respectively. Energy (2.46%), Consumer Defensive (3.09%), and Basic Materials (3.26%) only make up 8.81% of the fund’s total assets.
VXF’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Industrials, Consumer Cyclical, and Financial Services stocks at 7.29%, 8.16%, 11.31%, 11.35%, and 12.56%.
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%.
VXF is 8.70% more exposed to the Technology sector than SCHA (23.61% vs 14.91%). VXF’s exposure to Healthcare and Financial Services stocks is 1.25% lower and 1.93% lower respectively (15.25% vs. 16.5% and 12.56% vs. 14.49%). In total, Energy, Consumer Defensive, and Basic Materials also make up 2.27% less of the fund’s holdings compared to SCHA (8.81% vs. 11.08%).
|Square Inc A||1.2%|
|Zoom Video Communications Inc||1.04%|
|Uber Technologies Inc||0.93%|
|Blackstone Group Inc||0.83%|
|Snap Inc Class A||0.8%|
|Twilio Inc A||0.73%|
|CrowdStrike Holdings Inc Class A||0.63%|
|Marvell Technology Inc||0.6%|
VXF’s Top Holdings are Square Inc A, Zoom Video Communications Inc, Uber Technologies Inc, Moderna Inc, and Blackstone Group Inc at 1.2%, 1.04%, 0.93%, 0.9%, and 0.83%.
Snap Inc Class A (0.8%), Twilio Inc A (0.73%), and DocuSign Inc (0.68%) have a slightly smaller but still significant weight. CrowdStrike Holdings Inc Class A and Marvell Technology Inc are also represented in the VXF’s holdings at 0.63% and 0.6%.
|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 Extended Market Index Fund ETF Shares (VXF) has a Beta of 1.23 with a R-squared of 85.73 and a Alpha of -3.26. Its Standard Deviation is 18.04 while VXF’s Mean Return is 1.24. Furthermore, the fund has a Treynor Ratio of 10.92 and a Sharpe Ratio of 0.79.
The Schwab U.S. Small-Cap ETF (SCHA) has a Treynor Ratio of 9.62 with a Alpha of -4.65 and a Mean Return of 1.14. Its Beta is 1.25 while SCHA’s R-squared is 82.26. Furthermore, the fund has a Standard Deviation of 18.68 and a Sharpe Ratio of 0.7.
VXF’s Mean Return is 0.10 points higher than that of SCHA and its R-squared is 3.47 points higher. With a Standard Deviation of 18.04, VXF is slightly less volatile than SCHA. The Alpha and Beta of VXF are 1.39 points higher and 0.02 points lower than SCHA’s Alpha and Beta.
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VXF had its best year in 2013 with an annual return of 38.37%. VXF’s worst year over the past decade yielded -9.37% and occurred in 2018. In most years the Vanguard Extended Market Index Fund ETF Shares provided moderate returns such as in 2016, 2017, and 2012 where annual returns amounted to 16.16%, 18.1%, and 18.48% 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 VXF would have resulted in a final balance of $34,598. This is a profit of $24,598 over 10 years and amounts to a compound annual growth rate (CAGR) of 15.47%.
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%.
VXF’s CAGR is 2.85 percentage points higher than that of SCHA and as a result, would have yielded $4,563 more on a $10,000 investment. Thus, VXF outperformed SCHA by 2.85% annually.
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