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VUG vs SCHG: Which Is The Best Growth ETF?

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We Compare VUG vs SCHG:

We are going to explore the difference between Vanguard Growth ETF (VUG) vs Schwab U.S. Large-Cap Growth ETF (SCHG)

Choosing between two funds can be difficult, but I will make it easy to decide between VUG vs SCHG.

VUG vs SCHG Graphic

 

VUG vs SCHG

The primary difference between VUG and SCHG is the company that offers the exchange-traded fund (ETF).  SCHG is offered by Charles Schwab, while Vanguard offers VUG.

They also track different indexes.  For example, SCHG tracks the Dow Jones U.S. Large-Cap Growth Total Stock Market Index, while VUG tracks the CRSP US Large-Cap Growth Index.

Another significant difference is the number of stocks in each, with VUG having 287 different companies in the index compared to 229 with SCHG.

Vanguard offers VUG.

Charles Schwab offers SCHG.

VUG and SCHG have the same expense ratio of 0.04%, making them low-cost ETFs.

VUG

  • Fund Inception: 2004
  • Offered By Vanguard
  • Tracks the CRSP US Large Cap Growth Index
  • Expense Ratio: 0.04%
  • Number Of Stocks: 287
  • Dividend Yield 0.45%
  • Equivalent Admiral Fund (VIGAX)

SCHG

  • Fund Inception: 2009
  • Offered By Charles Schwab
  • Tracks Dow Jones U.S. Large-Cap Growth Total Stock Market Index
  • Expense Ratio: 0.04%
  • Number Of Stocks: 229

 

VUG vs SCHG Performance

VUG and SCHG have similar performance returns over the last 10 years, with SCHG beating VUG by 0.74% annually.

Here is how their performance compares:

VUG vs SCHG Performance Comparison

Here is another comparison of short term performance:

VUG vs SCHG Performance Chart

Again, as you can see, they have performed the same over the short and long term.

This performance is because they both aim to have the same market exposure.

 

VUG vs SCHG Holdings

There is a difference in the number of holdings for VUG and SCHG.  VUG includes 287 stocks in the ETF, while SCHG holds 229 stocks. A difference of 58 holdings.

VUG holds more companies compared to SCHG.

Both funds have the same sector diversification.  SCHG is 50% technology which is the same as VUG.

However, VUG has slightly more diversification due to its 287 holdings compared to only 229 with SCHG.

Lastly, VUG and SCHG’s top 10 holdings make up around 50% of their assets.

Here are VUG and SCHG holdings side-by-side:

VUG vs SCHG Holdings

The only difference between SCHG and VUG’s top 10 holdings is SCHG includes UnitedHealth Group while VUG has Home Depot.

 

VUG vs SCHG Overlap

There is an overlap between VUG and SCHG that includes 156 stocks.  69% of the holdings in SCHG are also in VUG.  However, only 59% of VUG’s holdings are in SCHG.

Here are SCHG and VUG holdings overlap:

VUG vs SCHG Holdings Overlap

This overlap means VUG includes a large portion of holdings that are in SCHG and includes many more holdings.

Overlap By Weight

VUG has more diversification compared to SCHG.

 

VUG and SCHG Differences

The main difference between VUG and SCHG is the company that offers the fund.  SCHG is offered by Schwab, while Vanguard offers VUG.

They also differ in the number of holdings.  VUG holds 287 companies, while SCHG holds 229, making it smaller than VUG.

Lastly, VUG provides more liquidity with $162 billion in net assets compared to $15 billion with SCHG.

VUG vs SCHG Comparison Chart

By investing in an ETF with more holdings, you are helping diversify your portfolio and minimize risk.

Differences between VUG and SCHG:

  • Brokerage (VUG is Vanguard, SCHG is Schwab)
  • Different Number Of Holdings (287 vs 229)
  • Liquidity
  • Tracking Index

 

VUG Profile

  • Fund Inception: 2004
  • Expense Ratio: 0.04%
  • Number Of Stocks: 287
  • Top 10 Holdings: 50%
  • Equivalent Admiral Fund (VIGAX)

Vanguard Growth ETF (VUG) is an ETF focused on growth companies.  The price-to-earning (P/E) ratio for VUG is 38.8x which is high.

The fund has $169 billion in total net assets.

 

VUG Performance

Vanguards Growth ETF (VUG) has outperformed the S&P 500 and, therefore, Vanguard 500 Index Fund ETF (VOO) over the last 10 years:

VUG Performance Chart

VUG (Blue)    S&P 500 (Yellow)

However, be mindful that this does not guarantee the next 10 years will look the same.

 

VUG Holdings

Vanguard’s VUG is largely made up of Apple, Microsoft, Google, Amazon, and Tesla and provides exposure to over 250 stocks.

VUG Top 10 Holdings

The top 10 holdings make up 50% of the portfolio.

This makes VUG less diversified than other ETFs such as Vanguard Total Stock Market Index Fund ETF (VTI).

 

No Minimum Investment

SCHG and VUG are exchange-traded funds (ETFs), so there is no minimum investment.  Investors looking to buy fractional shares can use platforms like M1 Finance.  (Use this link for a $50 bonus)

Typically, fractional shares are not available for ETFs, but with M1 Finance, you can purchase fractional shares with no commission.

Buying fractional shares allows you to maximize your investment.  This is great for shares of VUG due to its high prices per share.

There are two easy ways to invest in VUG or SCHG commission-free.

  1. Vanguard to invest in VUG or Charles Schwab for SCHG
  2. M1 Finance to invest in either VUG or SCHG.  (Use this link for $50 when you open a new account)

Both of these options are free.  This is important because fees can lower our returns.

I like M1 Finance as the best option because it gives you the flexibility to purchase VUG, SCHG, and thousands of other stocks.

I also use Personal Capital to track my investment fees. They have a free Retirement Fee Analyzer that tells you the future impact of fees on your portfolio.

Personal Capital Retirement Fee Analyzer

Personal Capital’s free tools allow you to easily find which of your investments has high fees so that you can switch them to low-cost options.  (Get a $20 Amazon Gift Card with this link when you add at least one investment account containing a balance of more than $1,000 within 30 days)

 

SCHG Description

  • Fund Inception: 2009
  • Offered By Charles Schwab
  • Tracks Dow Jones U.S. Large-Cap Growth Total Stock Market Index
  • Expense Ratio: 0.04%
  • Number Of Stocks: 229

The Schwab U.S. Large-Cap Growth ETF (SCHG) launched in 2009 and tracks the Dow Jones U.S. Large-Cap Growth Total Stock Market Index.

SCHG is passively managed to give investors exposure to the U.S large-cap growth equity market.  Equities include large, mid, and small-cap companies.

It has over $15 billion, making it one of the largest ETFs to track the growth U.S. equity market.

Large, mid, and small-cap companies provide more diversification.  More diversification translates into less risk for investors.

 

SCHG Performance

SCHG closely monitors and seeks to replicate the performance of its underlying index, which is the Dow Jones U.S. Large-Cap Growth Total Stock Market Index.

This has resulted in excellent performance returns over the last 10 years:

SCHG Performance Chart

In addition, the ETF gives investors access to over 200 of the most prominent growth companies in the United States with diversification into all market capitalizations.

SCHG Performance

As you can see, SCHG has performed well since its inception in 2009.

The ETF has a beta of 1.00 and a standard deviation of 18.34% for the trailing three-year period.  This makes SCHG a medium-risk choice in its class.

The fund has roughly 229 holdings.

Schwab U.S. Large-Cap Growth ETF may be a good option for investors looking for growth in the U.S. market.

The fund also has a low expense ratio and significant momentum.

 

SCHG Costs

One of the many vital factors to consider in choosing an ETF is cost.  To analyze the cost of an ETF, you should look at the expense ratio.

Cheaper funds tend to yield higher profits since they spend less on management.

SCHG is one of the cheapest exchange trade funds, with an expense ratio of 0.04%.

In other words, for a $10,000 investment, the ETF charges you $4 for annual operating expenses.

 

SCHG Holdings

The top 10 holdings for SCHG make up 57% of its total assets.

SCHG Holdings

Schwab’s SCHG is primarily made up of Apple, Microsoft, Amazon, Alphabet, and Tesla and provides exposure to over 200 stocks.

If you are looking for a Schwab fund similar to SCHG, you can look at the Schwab U.S. Dividend Equity ETF (SCHD).

 

Which Is Better VUG or SCHG?

VUG and SCHG are similar investments.  They have had a similar performance over the last 10 years and have the same expense ratio of 0.04%.

VUG offers more diversification and less volatility since it holds more stocks.

Which is better will likely depend on which brokerage you prefer to use.

Vanguard customers will likely prefer VUG.

Charles Schwab customers will probably select SCHG.

That said, slight differences could make VUG better for some investors.

VUG has more diversification and less volatility.  It also offers more liquidity with $162 billion in net assets.

It’s important to consider costs and fees because they can cost you in the long run.  That’s why it’s so important to buy and sell your shares commission-free.

Again a great way to do this is with M1 Finance.

You can purchase fractional shares for free, and they give you the ability to buy VUG, SCHG, and thousands of other stocks/ETFs.

 

Is VUG or SCHG Better For Financial Independence?

Both VUG and SCHG have performed well enough to get you to Financial Independence Retire Early (FIRE).  They both have performed excellent over the last 10 years and have low expense ratios.

Being part of the FIRE community, we aim for the lowest fees possible, and we are big fans of Vanguard.

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For those reasons, I prefer VUG over SCHG.

Related Posts:

 

My Winner: VUG

My winner is VUG based on the higher diversification and the fact that I love Vanguard.

Vanguard’s VUG offers:

  • Diversification
  • Low Fees
  • Vanguard Fund

Low fees are a guaranteed way to keep more money in your portfolio!

For even more diversification, I would also suggest considering an ETF like Vanguard’s Total Market Admiral fund VTSAX.

 


Disclaimer
This post may have affiliate links, which means I may receive commissions if you choose to purchase through links I provide (at no extra cost to you). Thank you for supporting the work I put into this site!

This information is my opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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