You have decided to tilt your portfolio toward **Growth**. You want companies that are expanding revenues, dominating markets, and driving innovation. You don't want the slow-moving banks or utility companies found in value funds.
The two heavyweights in this arena are **SCHG (Schwab U.S. Large-Cap Growth ETF)** and **VUG (Vanguard Growth ETF)**. Both are incredibly cheap, liquid, and popular. But they are not identical. This manual will break down their subtle differences so you can choose the right engine for your wealth building.
The Strategy: How They Pick Winners
Both funds aim to capture the growth factor, but their filters differ slightly.
1. SCHG (Schwab) - The Focused Sniper
SCHG tracks the Dow Jones U.S. Large-Cap Growth Total Stock Market Index. It holds around **250 stocks**. It tends to be slightly more concentrated in its top 10 holdings (Apple, Microsoft, Nvidia, etc.) than VUG. This means if Big Tech rallies, SCHG often wins by a hair.
2. VUG (Vanguard) - The Broad Net
VUG tracks the CRSP US Large Cap Growth Index. It holds around **200-250 stocks** (similar count, but methodology differs). VUG is often viewed as a slightly "purer" representation of the broad growth category without taking as much concentration risk as the Nasdaq 100.
Performance Reality Check
Because they hold the same massive companies in their top 10 (which account for 50%+ of the fund), their performance lines are almost glued together. SCHG has slightly outperformed VUG over the last 5-10 years, primarily due to its slightly higher weighting in the best-performing tech giants.
Comparison Matrix (SCHG vs VUG)
The differences are in the details.
| Feature | SCHG (Schwab) | VUG (Vanguard) |
|---|---|---|
| Expense Ratio | 0.04% | 0.04% |
| Number of Holdings | ~250 | ~200 |
| Tech Concentration | Slightly Higher | High |
| Verdict | Best for Aggressive Growth | Best for Vanguard Loyalists |
The Verdict: Brokerage Decides
Scenario A: You use Schwab or Fidelity → Choose SCHG
SCHG is the natural choice for Schwab users. It is essentially the same product as VUG but with a track record of being slightly more aggressive in capturing tech gains.
Scenario B: You use Vanguard → Choose VUG
If you are in the Vanguard ecosystem, VUG allows you to buy and sell without friction. It is the perfect companion to a core S&P 500 holding like VOO.
Conclusion: A Tie Game
There is no loser here. Both SCHG and VUG are elite, low-cost funds. Pick the one that matches your brokerage to keep things simple, and focus on increasing your savings rate instead of splitting hairs over 0.01% performance differences.
