SCHG vs. VUG: Here's How to Decide on the Right Growth ETF for Your Portfolio
Key Points
Both funds charge the same low expense ratio and offer nearly identical dividend yields.
VUG has delivered a higher one-year return, while SCHG showed slightly lower volatility and a shallower drawdown.
While both funds are heavily tilted toward technology, SCHG is slightly broader and more diversified.
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The Vanguard Growth ETF (NYSEMKT:VUG) and the Schwab U.S. Large-Cap Growth ETF (NYSEMKT:SCHG) both aim to provide exposure to the growth segment of large-cap U.S. stocks, tracking slightly different indexes with heavy technology tilts.
This analysis compares the two on cost, performance, risk, and portfolio makeup to help investors decide which may better fit their needs.
Snapshot (cost & size)
| Metric | VUG | SCHG |
|---|---|---|
| Issuer | Vanguard | Schwab |
| Expense ratio | 0.04% | 0.04% |
| 1-yr return (as of Jan. 15, 2026) | 20.19% | 17.88% |
| Dividend yield | 0.41% | 0.36% |
| AUM | $352 billion | $53 billion |
| Beta (5Y monthly) | 1.21 | 1.17 |
Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.
Both ETFs are equally affordable on fees, charging a 0.04% expense ratio. With nearly identical dividend yields as well, neither stands out in terms of cost or payout.
Performance & risk comparison
| Metric | VUG | SCHG |
|---|---|---|
| Max drawdown (5 y) | -35.61% | -34.59% |
| Growth of $1,000 over 5 years | $1,929 | $2,036 |
What's inside
SCHG holds 198 companies, offering exposure to U.S. large-cap growth. Its portfolio is comprised of 45% technology stocks, 16% communication services, and 13% consumer cyclical, with top positions in Nvidia, Apple, and Microsoft.
VUG, by contrast, holds 160 stocks with an even heavier tilt toward technology at 51%, followed by communication services and consumer cyclical. Its largest holdings mirror SCHG, but each stock makes up a slightly larger portion of the portfolio. Neither fund introduces leverage, currency hedging, or ESG screens.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
SCHG and VUG both capture the large-cap growth segment of the market, but they differ in their scope and diversification.
VUG is slightly narrower in focus, with fewer holdings and a stronger tilt toward tech stocks. The two funds share the same top three stocks, but they make up 32% of VUG's portfolio compared to 29% for SCHG. While it's a subtle difference, it can result in slightly different returns if those top holdings over- or underperform going forward.
VUG's heavier tech allocation can also lead to greater volatility. It's experienced marginally steeper drawdowns over the last five years, and its slightly higher beta also suggests more significant price fluctuations.
The two funds offer the same expense ratio and close to the same dividend yield, so investors won't notice much of a difference in fees and payout. The primary difference between them, then, is their slightly different risk profiles.
Investors looking for increased exposure to tech may prefer VUG's narrower portfolio, while those seeking greater diversification and marginally more stability may opt for SCHG.
Glossary
ETF (Exchange-Traded Fund): A fund holding a basket of securities, traded on an exchange like a stock.
Expense ratio: Annual fund operating costs expressed as a percentage of the fund’s average assets.
Dividend yield: Annual dividends paid by a fund or stock divided by its current share price.
Growth fund: A fund focusing on companies expected to grow earnings faster than the overall market.
Large-cap: Refers to companies with large market values, typically tens or hundreds of billions of dollars.
Index: A rules-based list of securities used to track or measure a segment of the market.
Total return: Investment performance including price changes plus all dividends and distributions, assuming reinvestment.
1-year return: Total return generated by an investment over the most recent 12-month period.
Beta: A measure of an investment’s volatility compared with the overall market, often the S&P 500.
Max drawdown: The largest peak-to-trough decline in an investment’s value over a specified period.
AUM (Assets Under Management): The total market value of all assets managed within a fund.
Sector weight: The percentage of a fund’s assets invested in a particular industry or sector.
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Katie Brockman has positions in Vanguard Index Funds - Vanguard Growth ETF. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Vanguard Index Funds - Vanguard Growth ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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