The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the Schwab U.S. Dividend Equity ETF (SCHD) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and SCHD is a Schwab ETFs Large Value fund. So, what’s the difference between VXUS and SCHD? And which fund is better?
The expense ratio of VXUS is 0.02 percentage points higher than SCHD’s (0.08% vs. 0.06%). VXUS also has a lower exposure to the financial services sector and a higher standard deviation. Overall, VXUS has provided lower returns than SCHD over the past ten years.
In this article, we’ll compare VXUS vs. SCHD. We’ll look at holdings and portfolio growth, as well as at their fund composition and performance. Moreover, I’ll also discuss VXUS’s and SCHD’s annual returns, industry exposure, and risk metrics and examine how these affect their overall returns.
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Summary
| VXUS | SCHD | |
| Name | Vanguard Total International Stock Index Fund ETF Shares | Schwab U.S. Dividend Equity ETF |
| Category | Foreign Large Blend | Large Value |
| Issuer | Vanguard | Schwab ETFs |
| AUM | 404.73B | 26B |
| Avg. Return | 8.41% | 14.80% |
| Div. Yield | 2.44% | 2.89% |
| Expense Ratio | 0.08% | 0.06% |
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. Dividend Equity ETF (SCHD) is a Large Value fund that is issued by Schwab ETFs. It currently has 26B total assets under management and has yielded an average annual return of 14.80% over the past 10 years. The fund has a dividend yield of 2.89% with an expense ratio of 0.06%.
VXUS’s dividend yield is 0.45% lower than that of SCHD (2.44% vs. 2.89%). Also, VXUS yielded on average 6.40% less per year over the past decade (8.41% vs. 14.80%). The expense ratio of VXUS is 0.02 percentage points higher than SCHD’s (0.08% vs. 0.06%).
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Fund Composition
Industry Exposure
| VXUS | SCHD | |
| Technology | 13.07% | 16.26% |
| Industrials | 12.94% | 18.05% |
| Energy | 4.55% | 1.87% |
| Communication Services | 7.06% | 4.96% |
| Utilities | 2.94% | 0.0% |
| Healthcare | 9.19% | 12.64% |
| Consumer Defensive | 7.83% | 14.04% |
| Real Estate | 3.79% | 0.0% |
| Financial Services | 17.64% | 21.69% |
| Consumer Cyclical | 12.64% | 8.36% |
| Basic Materials | 8.37% | 2.13% |
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. Dividend Equity ETF (SCHD) has the most exposure to the Financial Services sector at 21.69%. This is followed by Industrials and Technology at 18.05% and 16.26% respectively. Utilities (0.0%), Energy (1.87%), and Basic Materials (2.13%) only make up 4.00% of the fund’s total assets.
SCHD’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Healthcare, Consumer Defensive, and Technology stocks at 4.96%, 8.36%, 12.64%, 14.04%, and 16.26%.
VXUS is 4.05% less exposed to the Financial Services sector than SCHD (17.64% vs 21.69%). VXUS’s exposure to Technology and Industrials stocks is 3.19% lower and 5.11% lower respectively (13.07% vs. 16.26% and 12.94% vs. 18.05%). In total, Real Estate, Energy, and Communication Services also make up 8.57% more of the fund’s holdings compared to SCHD (15.40% vs. 6.83%).
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%.
| SCHD Holdings | Weight |
| Merck & Co Inc | 4.24% |
| The Home Depot Inc | 4.19% |
| Texas Instruments Inc | 4.16% |
| Broadcom Inc | 4.15% |
| Amgen Inc | 4.11% |
| PepsiCo Inc | 4.09% |
| BlackRock Inc | 4.05% |
| Pfizer Inc | 3.97% |
| Verizon Communications Inc | 3.96% |
| Cisco Systems Inc | 3.96% |
SCHD’s Top Holdings are Merck & Co Inc, The Home Depot Inc, Texas Instruments Inc, Broadcom Inc, and Amgen Inc at 4.24%, 4.19%, 4.16%, 4.15%, and 4.11%.
PepsiCo Inc (4.09%), BlackRock Inc (4.05%), and Pfizer Inc (3.97%) have a slightly smaller but still significant weight. Verizon Communications Inc and Cisco Systems Inc are also represented in the SCHD’s holdings at 3.96% and 3.96%.
Risk Analysis
| VXUS | SCHD | |
| Mean Return | 0.56 | 0 |
| R-squared | 98.39 | 0 |
| Std. Deviation | 15.12 | 0 |
| Alpha | 0.31 | 0 |
| Beta | 0.99 | 0 |
| Sharpe Ratio | 0.4 | 0 |
| Treynor Ratio | 5.14 | 0 |
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Beta of 0.99 with a Sharpe Ratio of 0.4 and a Alpha of 0.31. Its R-squared is 98.39 while VXUS’s Mean Return is 0.56. Furthermore, the fund has a Standard Deviation of 15.12 and a Treynor Ratio of 5.14.
The Schwab U.S. Dividend Equity ETF (SCHD) has a Alpha of 0 with a Sharpe Ratio of 0 and a R-squared of 0. Its Beta is 0 while SCHD’s Standard Deviation is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Mean Return of 0.
VXUS’s Mean Return is 0.56 points higher than that of SCHD and its R-squared is 98.39 points higher. With a Standard Deviation of 15.12, VXUS is slightly more volatile than SCHD. The Alpha and Beta of VXUS are 0.31 points higher and 0.99 points higher than SCHD’s Alpha and Beta.
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Performance
Annual Returns
| Year | VXUS | SCHD |
| 2020 | 11.32% | 15.11% |
| 2019 | 21.58% | 27.28% |
| 2018 | -14.42% | -5.46% |
| 2017 | 27.52% | 20.88% |
| 2016 | 4.72% | 16.25% |
| 2015 | -4.28% | -0.21% |
| 2014 | -4.17% | 11.66% |
| 2013 | 15.16% | 32.9% |
| 2012 | 18.22% | 11.4% |
| 2011 | 0.0% | 0.0% |
| 2010 | 0.0% | 0.0% |
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 SCHD, returning 32.9% on an annual basis. The poorest year for SCHD in the last ten years was 2018, with a yield of -5.46%. Most years the Schwab U.S. Dividend Equity ETF has given investors modest returns, such as in 2012, 2014, and 2020, when gains were 11.4%, 11.66%, and 15.11% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VXUS | $10,000 | $16,338 | 8.41% |
| SCHD | $10,000 | $28,823 | 14.80% |
A $10,000 investment in VXUS would have resulted in a final balance of $16,338. This is a profit of $6,338 over 8 years and amounts to a compound annual growth rate (CAGR) of 8.41%.
With a $10,000 investment in SCHD, the end total would have been $28,823. This equates to a $18,823 profit over 8 years and a compound annual growth rate (CAGR) of 14.80%.
VXUS’s CAGR is 6.40 percentage points lower than that of SCHD and as a result, would have yielded $12,485 less on a $10,000 investment. Thus, VXUS performed worse than SCHD by 6.40% annually.
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