VXUS vs SCHD: A Comprehensive Comparison

If you are looking for a way to invest in international stocks, then you might have come across the Vanguard Total International Stock Index Fund ETF (VXUS) and the Schwab US Dividend Equity ETF (SCHD).

VXUS vs SCHD: Both of these ETFs offer exposure to different segments of the stock market and may be suitable for different investment objectives.

In this article, we will take a closer look at VXUS vs SCHD and compare their performance, cost, holdings, and other factors that may influence your investment decision.

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Understanding VXUS and SCHD VXUS is an ETF that tracks the performance of the FTSE Global All Cap ex US Index, which is designed to measure the equity market performance of companies located outside the United States.

The fund invests in a diversified portfolio of stocks across various sectors and countries, including developed and emerging markets. SCHD, on the other hand, is an ETF that tracks the performance of the Dow Jones US Dividend 100 Index, which is designed to measure the performance of high dividend yielding US stocks. The fund invests in a diversified portfolio of large-cap US stocks across various sectors.

Comparative Analysis When comparing VXUS vs SCHD, there are several factors to consider, such as performance, cost, holdings, and investment strategy. VXUS has a lower expense ratio than SCHD, but SCHD has a higher dividend yield. VXUS has a higher exposure to emerging markets, while SCHD has a higher exposure to the financial sector.

Both funds have a similar market capitalization and a similar number of holdings. However, VXUS has a higher turnover rate than SCHD, which may result in higher transaction costs and tax consequences.

Key Takeaways VXUS vs SCHD

  • VXUS and SCHD are two ETFs that offer exposure to different segments of the stock market.
  • VXUS tracks the performance of international stocks, while SCHD tracks the performance of high dividend yielding US stocks.
  • When comparing VXUS vs SCHD, investors should consider factors such as performance, cost, holdings, and investment strategy.

Understanding VXUS vs SCHD

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Overview of VXUS

VXUS is an exchange-traded fund (ETF) that invests in international stocks. The fund is managed by Vanguard and holds over 7,000 stocks from non-U.S. markets. VXUS seeks to track the performance of the FTSE Global All Cap ex US Index, which includes stocks from developed and emerging markets outside of the United States.

The fund has an expense ratio of 0.08%, which is lower than the average expense ratio for international stock ETFs. VXUS has a dividend yield of 2.76%, which is lower than the average dividend yield for international stock ETFs. The fund is registered with the US Securities and Exchange Commission (SEC).

Overview of SCHD

SCHD is an ETF that invests in U.S. stocks with a focus on high dividend yields. The fund is managed by Charles Schwab and holds over 100 U.S. stocks. SCHD seeks to track the performance of the Dow Jones U.S. Dividend 100 Index, which includes U.S. stocks with a history of consistently paying dividends.

The fund has an expense ratio of 0.06%, which is lower than the average expense ratio for U.S. stock ETFs. SCHD has a dividend yield of 3.11%, which is higher than the average dividend yield for U.S. stock ETFs. The fund is registered with the US Securities and Exchange Commission (SEC).

Both VXUS and SCHD are ETFs that offer investors exposure to different markets. VXUS focuses on international stocks, while SCHD focuses on U.S. stocks with high dividend yields. When considering which ETF to invest in, it is important to consider your investment goals and risk tolerance. Additionally, it is important to consider the expense ratio and dividend yield of each fund.

Comparative Analysis VXUS vs SCHD

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Expense Ratio

When it comes to the expense ratio, SCHD has a slightly lower expense ratio of 0.06% compared to VXUS’s 0.08%. This means that you will pay less in fees if you invest in SCHD. However, it’s important to note that both funds have relatively low expense ratios compared to other similar funds in the market.

Historical Performance

In terms of historical performance, both SCHD and VXUS have had strong returns over the past 10 years. According to mrmarvinallen.com, SCHD has provided higher returns than VXUS over the past decade. However, it’s important to remember that past performance is not indicative of future results.

Dividend Yield Comparison

One of the key differences between SCHD and VXUS is their dividend yield. SCHD is focused on US stocks and has a higher dividend yield of 2.88%, while VXUS is focused on international stocks and has a lower dividend yield of 2.07%. This means that if you are looking for higher dividend payouts, SCHD may be the better choice for you.

Overall, when comparing SCHD and VXUS, it’s important to consider your investment goals and risk tolerance. Both funds have their pros and cons, and it’s up to you to decide which one is the better fit for your portfolio.

Portfolio Composition VXUS vs SCHD

Holdings Breakdown

When it comes to portfolio composition, it’s essential to understand the holdings of each ETF. SCHD invests in high dividend yielding US companies, while VXUS invests in international companies. SCHD holds 107 stocks, with the top five holdings being Home Depot, Verizon, Pfizer, Intel, and IBM. On the other hand, VXUS holds over 7,000 stocks, with the top five holdings being Taiwan Semiconductor Manufacturing, Tencent Holdings, Alibaba Group Holding, Samsung Electronics, and Nestle. VXUS has a more diversified portfolio, while SCHD has a more concentrated portfolio.

Sector Allocation

The sector allocation of an ETF can give you an idea of which industries the ETF is invested in. SCHD has a significant allocation to the technology sector, with 21.7% of its portfolio invested in technology companies. Other significant sectors include healthcare, consumer staples, and industrials. VXUS, on the other hand, has a more balanced sector allocation, with no sector accounting for more than 15% of its portfolio. The top sectors for VXUS are financials, consumer discretionary, and industrials.

Geographical Exposure

Finally, it’s important to consider the geographical exposure of each ETF. SCHD invests entirely in US companies, while VXUS invests in companies from all over the world. VXUS has a more significant allocation to developed markets, with 75.1% of its portfolio invested in developed markets and 24.9% in emerging markets. The top countries for VXUS are Japan, the United Kingdom, and Canada. SCHD, on the other hand, has 100% of its portfolio invested in the US.

Overall, when it comes to portfolio composition, SCHD has a more concentrated portfolio of US companies, while VXUS has a more diversified portfolio of international companies. SCHD has a significant allocation to the technology sector, while VXUS has a more balanced sector allocation. Finally, VXUS has exposure to companies from all over the world, while SCHD invests entirely in US companies.

Investment Strategy

Investment Approach

When considering VXUS vs SCHD, it’s important to understand each fund’s investment approach. VXUS is a global ex-U.S. ETF that seeks to track the performance of the FTSE Global All Cap ex US Index. This index includes large, mid, and small-cap stocks from developed and emerging markets outside of the U.S. SCHD, on the other hand, is a U.S. equity ETF that seeks to track the performance of the Dow Jones U.S. Dividend 100 Index. This index includes 100 high-quality U.S. companies that have a history of consistently paying dividends.

Both VXUS and SCHD have different investment approaches, and therefore, they may appeal to different types of investors. If you’re looking for exposure to international markets, then VXUS may be a good choice. However, if you’re looking for U.S. equity exposure with a focus on dividends, then SCHD may be a more suitable option.

Risk Considerations

When investing in any ETF, it’s important to consider the risks involved. Both VXUS and SCHD have their own set of risks that investors should be aware of.

VXUS is an international ETF, which means it is subject to currency risk. Fluctuations in exchange rates can impact the fund’s returns. Additionally, emerging markets can be more volatile than developed markets, which can increase the fund’s overall risk.

SCHD is a U.S. equity ETF, which means it is subject to market risk. Market risk refers to the possibility of investment losses due to factors that affect the overall performance of the stock market. Additionally, SCHD’s focus on dividend-paying companies can make it more susceptible to interest rate risk. If interest rates rise, dividend-paying stocks may become less attractive to investors, which can impact the fund’s returns.

When considering VXUS vs SCHD, it’s important to evaluate your investment objectives and risk tolerance. You should also consider seeking the advice of a registered investment advisor who can help you determine which ETF is in your best interest.

Legal and Regulatory Information

Compliance and Regulations

When investing in exchange-traded funds (ETFs) such as VXUS and SCHD, it is important to understand the compliance and regulations involved. Both VXUS and SCHD are subject to federal regulations that govern the operations of ETFs. These regulations are designed to protect investors and ensure that ETFs are managed in a transparent and fair manner.

As an investor, it is important to review the legal disclosures provided by the ETFs to ensure that you are aware of the risks and fees associated with investing in these funds. This information can typically be found in the prospectus or other offering documents provided by the ETF.

Trademark and Copyright

VXUS and SCHD are both registered trademarks of their respective companies. The logos and other branding materials associated with these ETFs are also protected by trademark and copyright laws.

Investors should be aware that they cannot use the logos or other branding materials associated with these ETFs without permission from the trademark holders. Additionally, all content on the websites of these ETFs is protected by copyright laws, and investors should not reproduce or distribute this content without permission from the copyright holders.

In conclusion, understanding the compliance and regulations involved in investing in ETFs such as VXUS and SCHD is important to ensure that you are making informed investment decisions. Additionally, investors should be aware of the trademark and copyright protections associated with these ETFs to avoid any legal issues.

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