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VXUS vs. SCHG: What’s The Difference?

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the Schwab U.S. Large-Cap Growth ETF (SCHG) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and SCHG is a Schwab ETFs Large Growth fund. So, what’s the difference between VXUS and SCHG? And which fund is better?

The expense ratio of VXUS is 0.04 percentage points higher than SCHG’s (0.08% vs. 0.04%). VXUS also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VXUS has provided lower returns than SCHG over the past ten years.

In this article, we’ll compare VXUS vs. SCHG. We’ll look at annual returns and risk metrics, as well as at their holdings and fund composition. Moreover, I’ll also discuss VXUS’s and SCHG’s performance, portfolio growth, and industry exposure and examine how these affect their overall returns.

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Summary

VXUSSCHG
NameVanguard Total International Stock Index Fund ETF SharesSchwab U.S. Large-Cap Growth ETF
CategoryForeign Large BlendLarge Growth
IssuerVanguardSchwab ETFs
AUM404.73B15.16B
Avg. Return8.41%17.81%
Div. Yield2.44%0.43%
Expense Ratio0.08%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. 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%.

VXUS’s dividend yield is 2.01% higher than that of SCHG (2.44% vs. 0.43%). Also, VXUS yielded on average 9.40% less per year over the past decade (8.41% vs. 17.81%). The expense ratio of VXUS is 0.04 percentage points higher than SCHG’s (0.08% vs. 0.04%).

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Fund Composition

Industry Exposure

VXUS vs. SCHG - Industry Exposure

VXUSSCHG
Technology13.07%39.21%
Industrials12.94%3.01%
Energy4.55%0.2%
Communication Services7.06%17.07%
Utilities2.94%0.0%
Healthcare9.19%12.05%
Consumer Defensive7.83%2.15%
Real Estate3.79%1.64%
Financial Services17.64%7.98%
Consumer Cyclical12.64%15.01%
Basic Materials8.37%1.68%

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. 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%.

VXUS is 9.66% more exposed to the Financial Services sector than SCHG (17.64% vs 7.98%). VXUS’s exposure to Technology and Industrials stocks is 26.14% lower and 9.93% higher respectively (13.07% vs. 39.21% and 12.94% vs. 3.01%). In total, Real Estate, Energy, and Communication Services also make up 3.51% less of the fund’s holdings compared to SCHG (15.40% vs. 18.91%).

Holdings

VXUS - Holdings

VXUS HoldingsWeight
Taiwan Semiconductor Manufacturing Co Ltd1.62%
Tencent Holdings Ltd1.41%
Alibaba Group Holding Ltd Ordinary Shares1.26%
Nestle SA1.1%
Samsung Electronics Co Ltd1.05%
ASML Holding NV0.86%
Roche Holding AG0.81%
Toyota Motor Corp0.67%
LVMH Moet Hennessy Louis Vuitton SE0.61%
Novartis AG0.6%

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%.

SCHG - Holdings

SCHG HoldingsWeight
Apple Inc11.49%
Microsoft Corp10.91%
Amazon.com Inc7.89%
Facebook Inc A4.45%
Alphabet Inc A3.93%
Alphabet Inc Class C3.82%
Tesla Inc2.8%
NVIDIA Corp2.67%
Visa Inc Class A2.12%
UnitedHealth Group Inc2.02%

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%.

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Risk Analysis

VXUSSCHG
Mean Return0.561.46
R-squared98.3992.92
Std. Deviation15.1214.78
Alpha0.311.97
Beta0.991.05
Sharpe Ratio0.41.14
Treynor Ratio5.1416.3

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Alpha of 0.31 with a Sharpe Ratio of 0.4 and a Beta of 0.99. Its Mean Return is 0.56 while VXUS’s Standard Deviation is 15.12. Furthermore, the fund has a R-squared of 98.39 and a Treynor Ratio of 5.14.

The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Standard Deviation of 14.78 with a Beta of 1.05 and a R-squared of 92.92. Its Treynor Ratio is 16.3 while SCHG’s Sharpe Ratio is 1.14. Furthermore, the fund has a Alpha of 1.97 and a Mean Return of 1.46.

VXUS’s Mean Return is 0.90 points lower than that of SCHG and its R-squared is 5.47 points higher. With a Standard Deviation of 15.12, VXUS is slightly more volatile than SCHG. The Alpha and Beta of VXUS are 1.66 points lower and 0.06 points lower than SCHG’s Alpha and Beta.

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Performance

Annual Returns

VXUS vs. SCHG - Annual Returns

YearVXUSSCHG
202011.32%39.13%
201921.58%36.21%
2018-14.42%-1.35%
201727.52%28.04%
20164.72%6.76%
2015-4.28%3.26%
2014-4.17%15.74%
201315.16%33.96%
201218.22%17.02%
20110.0%-0.67%
20100.0%16.83%

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 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.

Portfolio Growth

VXUS vs. SCHG - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VXUS$10,000$19,3158.41%
SCHG$10,000$47,87717.81%

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 SCHG, the end total would have been $47,877. This equates to a $37,877 profit over 9 years and a compound annual growth rate (CAGR) of 17.81%.

VXUS’s CAGR is 9.40 percentage points lower than that of SCHG and as a result, would have yielded $28,562 less on a $10,000 investment. Thus, VXUS performed worse than SCHG by 9.40% annually.


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