VYM vs. SCHF: What’s The Difference?

The Vanguard High Dividend Yield Index Fund ETF Shares (VYM) and the Schwab International Equity ETF (SCHF) are both among the Top 100 ETFs. VYM is a Vanguard Large Value fund and SCHF is a Schwab ETFs Foreign Large Blend fund. So, what’s the difference between VYM and SCHF? And which fund is better?

VYM and SCHF have the same expense ratio: 0.06%. VYM also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VYM has provided higher returns than SCHF over the past ten years.

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

Summary

VYM SCHF
Name Vanguard High Dividend Yield Index Fund ETF Shares Schwab International Equity ETF
Category Large Value Foreign Large Blend
Issuer Vanguard Schwab ETFs
AUM 48.5B 26.99B
Avg. Return 12.20% 6.43%
Div. Yield 2.79% 2.16%
Expense Ratio 0.06% 0.06%

The Vanguard High Dividend Yield Index Fund ETF Shares (VYM) is a Large Value fund that is issued by Vanguard. It currently has 48.5B total assets under management and has yielded an average annual return of 12.20% over the past 10 years. The fund has a dividend yield of 2.79% with an expense ratio of 0.06%.

The Schwab International Equity ETF (SCHF) is a Foreign Large Blend fund that is issued by Schwab ETFs. It currently has 26.99B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 2.16% with an expense ratio of 0.06%.

VYM’s dividend yield is 0.63% higher than that of SCHF (2.79% vs. 2.16%). Also, VYM yielded on average 5.77% more per year over the past decade (12.20% vs. 6.43%). VYM and SCHF have the same expense ratio: 0.06%.

Fund Composition

Industry Exposure

VYM vs. SCHF - Industry Exposure

VYM SCHF
Technology 9.77% 11.55%
Industrials 10.14% 14.86%
Energy 7.12% 4.23%
Communication Services 5.91% 5.65%
Utilities 7.27% 3.09%
Healthcare 13.61% 11.05%
Consumer Defensive 14.13% 9.41%
Real Estate 0.02% 3.17%
Financial Services 22.05% 17.85%
Consumer Cyclical 5.57% 10.87%
Basic Materials 4.41% 8.26%

The Vanguard High Dividend Yield Index Fund ETF Shares (VYM) has the most exposure to the Financial Services sector at 22.05%. This is followed by Consumer Defensive and Healthcare at 14.13% and 13.61% respectively. Basic Materials (4.41%), Consumer Cyclical (5.57%), and Communication Services (5.91%) only make up 15.89% of the fund’s total assets.

VYM’s mid-section with moderate exposure is comprised of Energy, Utilities, Technology, Industrials, and Healthcare stocks at 7.12%, 7.27%, 9.77%, 10.14%, and 13.61%.

The Schwab International Equity ETF (SCHF) has the most exposure to the Financial Services sector at 17.85%. This is followed by Industrials and Technology at 14.86% and 11.55% respectively. Real Estate (3.17%), Energy (4.23%), and Communication Services (5.65%) only make up 13.05% of the fund’s total assets.

SCHF’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Consumer Cyclical, Healthcare, and Technology stocks at 8.26%, 9.41%, 10.87%, 11.05%, and 11.55%.

VYM is 4.20% more exposed to the Financial Services sector than SCHF (22.05% vs 17.85%). VYM’s exposure to Consumer Defensive and Healthcare stocks is 4.72% higher and 2.56% higher respectively (14.13% vs. 9.41% and 13.61% vs. 11.05%). In total, Basic Materials, Consumer Cyclical, and Communication Services also make up 8.89% less of the fund’s holdings compared to SCHF (15.89% vs. 24.78%).

Holdings

VYM - Holdings

VYM Holdings Weight
JPMorgan Chase & Co 3.53%
Johnson & Johnson 3.28%
The Home Depot Inc 2.59%
Procter & Gamble Co 2.48%
Bank of America Corp 2.35%
Exxon Mobil Corp 2.02%
Comcast Corp Class A 1.96%
Verizon Communications Inc 1.75%
Intel Corp 1.71%
Cisco Systems Inc 1.69%

VYM’s Top Holdings are JPMorgan Chase & Co, Johnson & Johnson, The Home Depot Inc, Procter & Gamble Co, and Bank of America Corp at 3.53%, 3.28%, 2.59%, 2.48%, and 2.35%.

Exxon Mobil Corp (2.02%), Comcast Corp Class A (1.96%), and Verizon Communications Inc (1.75%) have a slightly smaller but still significant weight. Intel Corp and Cisco Systems Inc are also represented in the VYM’s holdings at 1.71% and 1.69%.

SCHF - Holdings

SCHF Holdings Weight
Nestle SA 1.66%
Samsung Electronics Co Ltd 1.6%
ASML Holding NV 1.29%
Roche Holding AG 1.24%
Toyota Motor Corp 1.02%
LVMH Moet Hennessy Louis Vuitton SE 0.93%
Novartis AG 0.92%
Shopify Inc A 0.78%
AstraZeneca PLC 0.75%
SAP SE 0.74%

SCHF’s Top Holdings are Nestle SA, Samsung Electronics Co Ltd, ASML Holding NV, Roche Holding AG, and Toyota Motor Corp at 1.66%, 1.6%, 1.29%, 1.24%, and 1.02%.

LVMH Moet Hennessy Louis Vuitton SE (0.93%), Novartis AG (0.92%), and Shopify Inc A (0.78%) have a slightly smaller but still significant weight. AstraZeneca PLC and SAP SE are also represented in the SCHF’s holdings at 0.75% and 0.74%.

Risk Analysis

VYM SCHF
Mean Return 1.04 0.58
R-squared 88.88 98.16
Std. Deviation 12.69 15.08
Alpha -0.7 0.53
Beta 0.88 0.99
Sharpe Ratio 0.93 0.42
Treynor Ratio 13.24 5.39

The Vanguard High Dividend Yield Index Fund ETF Shares (VYM) has a Beta of 0.88 with a Alpha of -0.7 and a R-squared of 88.88. Its Sharpe Ratio is 0.93 while VYM’s Treynor Ratio is 13.24. Furthermore, the fund has a Mean Return of 1.04 and a Standard Deviation of 12.69.

The Schwab International Equity ETF (SCHF) has a Alpha of 0.53 with a Sharpe Ratio of 0.42 and a Treynor Ratio of 5.39. Its Mean Return is 0.58 while SCHF’s Beta is 0.99. Furthermore, the fund has a Standard Deviation of 15.08 and a R-squared of 98.16.

VYM’s Mean Return is 0.46 points higher than that of SCHF and its R-squared is 9.28 points lower. With a Standard Deviation of 12.69, VYM is slightly less volatile than SCHF. The Alpha and Beta of VYM are 1.23 points lower and 0.11 points lower than SCHF’s Alpha and Beta.

Performance

Annual Returns

VYM vs. SCHF - Annual Returns

Year VYM SCHF
2020 1.14% 9.86%
2019 24.2% 22.15%
2018 -5.87% -14.39%
2017 16.42% 25.83%
2016 16.87% 2.88%
2015 0.33% -2.44%
2014 13.47% -4.44%
2013 30.26% 20.03%
2012 12.68% 17.12%
2011 10.5% -12.32%
2010 14.17% 8.6%

VYM had its best year in 2013 with an annual return of 30.26%. VYM’s worst year over the past decade yielded -5.87% and occurred in 2018. In most years the Vanguard High Dividend Yield Index Fund ETF Shares provided moderate returns such as in 2012, 2014, and 2010 where annual returns amounted to 12.68%, 13.47%, and 14.17% respectively.

The year 2017 was the strongest year for SCHF, returning 25.83% on an annual basis. The poorest year for SCHF in the last ten years was 2018, with a yield of -14.39%. Most years the Schwab International Equity ETF has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 2.88%, 8.6%, and 9.86% respectively.

Portfolio Growth

VYM vs. SCHF - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VYM $10,000 $29,705 12.20%
SCHF $10,000 $17,089 6.43%

A $10,000 investment in VYM would have resulted in a final balance of $29,705. This is a profit of $19,705 over 10 years and amounts to a compound annual growth rate (CAGR) of 12.20%.

With a $10,000 investment in SCHF, the end total would have been $17,089. This equates to a $7,089 profit over 10 years and a compound annual growth rate (CAGR) of 6.43%.

VYM’s CAGR is 5.77 percentage points higher than that of SCHF and as a result, would have yielded $12,616 more on a $10,000 investment. Thus, VYM outperformed SCHF by 5.77% annually.


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