The Vanguard Extended Market Index Fund ETF Shares (VXF) and the Schwab U.S. Large-Cap Growth ETF (SCHG) are both among the Top 100 ETFs. VXF is a Vanguard Mid-Cap Growth fund and SCHG is a Schwab ETFs Large Growth fund. So, what’s the difference between VXF and SCHG? And which fund is better?
The expense ratio of VXF is 0.02 percentage points higher than SCHG’s (0.06% vs. 0.04%). VXF also has a lower exposure to the technology sector and a higher standard deviation. Overall, VXF has provided lower returns than SCHG over the past 10 years.
In this article, we’ll compare VXF vs. SCHG. We’ll look at annual returns and performance, as well as at their fund composition and portfolio growth. Moreover, I’ll also discuss VXF’s and SCHG’s risk metrics, holdings, and industry exposure and examine how these affect their overall returns.
|Name||Vanguard Extended Market Index Fund ETF Shares||Schwab U.S. Large-Cap Growth ETF|
|Category||Mid-Cap Growth||Large Growth|
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. Large-Cap Growth ETF (SCHG) is a Large Growth fund that is issued by Schwab ETFs. It currently has 15.16B total assets under management and has yielded an average annual return of 17.81% over the past 10 years. The fund has a dividend yield of 0.43% with an expense ratio of 0.04%.
VXF’s dividend yield is 0.76% higher than that of SCHG (1.19% vs. 0.43%). Also, VXF yielded on average 2.34% less per year over the past decade (15.47% vs. 17.81%). The expense ratio of VXF is 0.02 percentage points higher than SCHG’s (0.06% vs. 0.04%).
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. Large-Cap Growth ETF (SCHG) has the most exposure to the Technology sector at 39.21%. This is followed by Communication Services and Consumer Cyclical at 17.07% and 15.01% respectively. Energy (0.2%), Real Estate (1.64%), and Basic Materials (1.68%) only make up 3.52% of the fund’s total assets.
SCHG’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 2.15%, 3.01%, 7.98%, 12.05%, and 15.01%.
VXF is 15.60% less exposed to the Technology sector than SCHG (23.61% vs 39.21%). VXF’s exposure to Healthcare and Financial Services stocks is 3.20% higher and 4.58% higher respectively (15.25% vs. 12.05% and 12.56% vs. 7.98%). In total, Energy, Consumer Defensive, and Basic Materials also make up 4.78% more of the fund’s holdings compared to SCHG (8.81% vs. 4.03%).
|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%.
|Facebook Inc A||4.45%|
|Alphabet Inc A||3.93%|
|Alphabet Inc Class C||3.82%|
|Visa Inc Class A||2.12%|
|UnitedHealth Group Inc||2.02%|
SCHG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 11.49%, 10.91%, 7.89%, 4.45%, and 3.93%.
Alphabet Inc Class C (3.82%), Tesla Inc (2.8%), and NVIDIA Corp (2.67%) have a slightly smaller but still significant weight. Visa Inc Class A and UnitedHealth Group Inc are also represented in the SCHG’s holdings at 2.12% and 2.02%.
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Alpha of -3.26 with a Mean Return of 1.24 and a Beta of 1.23. Its Treynor Ratio is 10.92 while VXF’s Sharpe Ratio is 0.79. Furthermore, the fund has a Standard Deviation of 18.04 and a R-squared of 85.73.
The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Beta of 1.05 with a Mean Return of 1.46 and a Sharpe Ratio of 1.14. Its Standard Deviation is 14.78 while SCHG’s R-squared is 92.92. Furthermore, the fund has a Alpha of 1.97 and a Treynor Ratio of 16.3.
VXF’s Mean Return is 0.22 points lower than that of SCHG and its R-squared is 7.19 points lower. With a Standard Deviation of 18.04, VXF is slightly more volatile than SCHG. The Alpha and Beta of VXF are 5.23 points lower and 0.18 points higher than SCHG’s Alpha and Beta.
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 2020 was the strongest year for SCHG, returning 39.13% on an annual basis. The poorest year for SCHG in the last ten years was 2018, with a yield of -1.35%. Most years the Schwab U.S. Large-Cap Growth ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 15.74%, 16.83%, and 17.02% 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 SCHG, the end total would have been $47,556. This equates to a $37,556 profit over 10 years and a compound annual growth rate (CAGR) of 17.81%.
VXF’s CAGR is 2.34 percentage points lower than that of SCHG and as a result, would have yielded $12,958 less on a $10,000 investment. Thus, VXF performed worse than SCHG by 2.34% annually.
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