The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the Schwab U.S. Small-Cap ETF (SCHA) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and SCHA is a Schwab ETFs Small Blend fund. So, what’s the difference between VXUS and SCHA? And which fund is better?
The expense ratio of VXUS is 0.04 percentage points higher than SCHA’s (0.08% vs. 0.04%). VXUS also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VXUS has provided lower returns than SCHA over the past ten years.
In this article, we’ll compare VXUS vs. SCHA. We’ll look at annual returns and performance, as well as at their holdings and portfolio growth. Moreover, I’ll also discuss VXUS’s and SCHA’s industry exposure, risk metrics, and fund composition and examine how these affect their overall returns.
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Summary
| VXUS | SCHA | |
| Name | Vanguard Total International Stock Index Fund ETF Shares | Schwab U.S. Small-Cap ETF |
| Category | Foreign Large Blend | Small Blend |
| Issuer | Vanguard | Schwab ETFs |
| AUM | 404.73B | 16.51B |
| Avg. Return | 8.41% | 12.62% |
| Div. Yield | 2.44% | 0.98% |
| Expense Ratio | 0.08% | 0.04% |
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 404.73B total assets under management and has yielded an average annual return of 8.41% over the past 10 years. The fund has a dividend yield of 2.44% with an expense ratio of 0.08%.
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%.
VXUS’s dividend yield is 1.46% higher than that of SCHA (2.44% vs. 0.98%). Also, VXUS yielded on average 4.22% less per year over the past decade (8.41% vs. 12.62%). The expense ratio of VXUS is 0.04 percentage points higher than SCHA’s (0.08% vs. 0.04%).
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Fund Composition
Industry Exposure
| VXUS | SCHA | |
| Technology | 13.07% | 14.91% |
| Industrials | 12.94% | 15.37% |
| Energy | 4.55% | 3.35% |
| Communication Services | 7.06% | 3.5% |
| Utilities | 2.94% | 1.83% |
| Healthcare | 9.19% | 16.5% |
| Consumer Defensive | 7.83% | 3.75% |
| Real Estate | 3.79% | 7.83% |
| Financial Services | 17.64% | 14.49% |
| Consumer Cyclical | 12.64% | 14.48% |
| Basic Materials | 8.37% | 3.98% |
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has the most exposure to the Financial Services sector at 17.64%. This is followed by Technology and Industrials at 13.07% and 12.94% respectively. Real Estate (3.79%), Energy (4.55%), and Communication Services (7.06%) only make up 15.40% of the fund’s total assets.
VXUS’s mid-section with moderate exposure is comprised of Consumer Defensive, Basic Materials, Healthcare, Consumer Cyclical, and Industrials stocks at 7.83%, 8.37%, 9.19%, 12.64%, and 12.94%.
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%.
VXUS is 3.15% more exposed to the Financial Services sector than SCHA (17.64% vs 14.49%). VXUS’s exposure to Technology and Industrials stocks is 1.84% lower and 2.43% lower respectively (13.07% vs. 14.91% and 12.94% vs. 15.37%). In total, Real Estate, Energy, and Communication Services also make up 0.72% more of the fund’s holdings compared to SCHA (15.40% vs. 14.68%).
Holdings
| VXUS Holdings | Weight |
| Taiwan Semiconductor Manufacturing Co Ltd | 1.62% |
| Tencent Holdings Ltd | 1.41% |
| Alibaba Group Holding Ltd Ordinary Shares | 1.26% |
| Nestle SA | 1.1% |
| Samsung Electronics Co Ltd | 1.05% |
| ASML Holding NV | 0.86% |
| Roche Holding AG | 0.81% |
| Toyota Motor Corp | 0.67% |
| LVMH Moet Hennessy Louis Vuitton SE | 0.61% |
| Novartis AG | 0.6% |
VXUS’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, and Samsung Electronics Co Ltd at 1.62%, 1.41%, 1.26%, 1.1%, and 1.05%.
ASML Holding NV (0.86%), Roche Holding AG (0.81%), and Toyota Motor Corp (0.67%) have a slightly smaller but still significant weight. LVMH Moet Hennessy Louis Vuitton SE and Novartis AG are also represented in the VXUS’s holdings at 0.61% and 0.6%.
| SCHA Holdings | Weight |
| AMC Entertainment Holdings Inc Class A | 0.67% |
| Caesars Entertainment Inc | 0.51% |
| Cloudflare Inc | 0.48% |
| NovoCure Ltd | 0.45% |
| Plug Power Inc | 0.41% |
| 10x Genomics Inc Ordinary Shares – Class A | 0.34% |
| GameStop Corp Class A | 0.28% |
| RH | 0.27% |
| 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%.
Risk Analysis
| VXUS | SCHA | |
| Mean Return | 0.56 | 1.14 |
| R-squared | 98.39 | 82.26 |
| Std. Deviation | 15.12 | 18.68 |
| Alpha | 0.31 | -4.65 |
| Beta | 0.99 | 1.25 |
| Sharpe Ratio | 0.4 | 0.7 |
| Treynor Ratio | 5.14 | 9.62 |
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Mean Return of 0.56 with a Sharpe Ratio of 0.4 and a Standard Deviation of 15.12. Its Alpha is 0.31 while VXUS’s R-squared is 98.39. Furthermore, the fund has a Treynor Ratio of 5.14 and a Beta of 0.99.
The Schwab U.S. Small-Cap ETF (SCHA) has a Mean Return of 1.14 with a Sharpe Ratio of 0.7 and a Alpha of -4.65. Its R-squared is 82.26 while SCHA’s Treynor Ratio is 9.62. Furthermore, the fund has a Beta of 1.25 and a Standard Deviation of 18.68.
VXUS’s Mean Return is 0.58 points lower than that of SCHA and its R-squared is 16.13 points higher. With a Standard Deviation of 15.12, VXUS is slightly less volatile than SCHA. The Alpha and Beta of VXUS are 4.96 points higher and 0.26 points lower than SCHA’s Alpha and Beta.
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Performance
Annual Returns
| Year | VXUS | SCHA |
| 2020 | 11.32% | 19.35% |
| 2019 | 21.58% | 26.54% |
| 2018 | -14.42% | -11.75% |
| 2017 | 27.52% | 15.04% |
| 2016 | 4.72% | 19.88% |
| 2015 | -4.28% | -4.24% |
| 2014 | -4.17% | 6.53% |
| 2013 | 15.16% | 39.59% |
| 2012 | 18.22% | 18.24% |
| 2011 | 0.0% | -2.95% |
| 2010 | 0.0% | 28.31% |
VXUS had its best year in 2017 with an annual return of 27.52%. VXUS’s worst year over the past decade yielded -14.42% and occurred in 2018. In most years the Vanguard Total International Stock Index Fund ETF Shares provided moderate returns such as in 2010, 2016, and 2020 where annual returns amounted to 0.0%, 4.72%, and 11.32% 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.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VXUS | $10,000 | $19,315 | 8.41% |
| SCHA | $10,000 | $30,948 | 12.62% |
A $10,000 investment in VXUS would have resulted in a final balance of $19,315. This is a profit of $9,315 over 9 years and amounts to a compound annual growth rate (CAGR) of 8.41%.
With a $10,000 investment in SCHA, the end total would have been $30,948. This equates to a $20,948 profit over 9 years and a compound annual growth rate (CAGR) of 12.62%.
VXUS’s CAGR is 4.22 percentage points lower than that of SCHA and as a result, would have yielded $11,633 less on a $10,000 investment. Thus, VXUS performed worse than SCHA by 4.22% annually.
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