Forget VOO: This Growth ETF Returned 460.49% Over Ten Years to VOO’s 326.29%

For many investors, the Vanguard S&P 500 ETF (NYSEARCA:VOO) is the default long-term holding. It gives you one fund that owns the large U.S. companies in the S&P 500, and you rarely have to think about it. VOO earned that role through breadth and simplicity, and that case still holds. Over the past decade, though, the Schwab U.S. Large-Cap Growth ETF (NYSEARCA:SCHG) turned the same starting money into a much larger sum.

Both ten-year windows begin on October 21, 2016, and both reflect total returns with distributions reinvested. Over that span, SCHG returned 460.49% against VOO’s 326.29%, a gap of 134.2 percentage points. In dollars, a $100,000 position grew to $560,490 in SCHG and $426,290 in VOO. That gap explains the growth fund’s appeal to long-horizon investors, though the shorter windows add important context.

Five-Year Returns Land Almost Even

Shorten the window, and most of the gap goes away. From October 21, 2021, SCHG returned 86.44%, and VOO returned 83.05%, a margin of just 3.39 percentage points. The same $100,000 became $186,440 in SCHG versus $183,050 in VOO.

Over the most recent five years, the two funds finished close together, which means most of the ten-year gap came from the first half of the decade. If you are deciding today, the headline number describes a run that mostly ended years ago.

VOO Has Led Over the Past Year

Recent results favor VOO. Over one year, VOO returned 16.66% while SCHG returned 11.70%, putting the Vanguard fund ahead by 4.96 percentage points. Anyone who bought SCHG a year ago, or switched VOO for it, has fallen behind the broad market fund.

The pattern holds this year too. Year-to-date, VOO is up 14.48% against SCHG’s 10.60%, a 3.88 percentage point lead. Over the past month, the two moved almost in step, with VOO at 1.68% and SCHG at 1.60%. Wednesday afternoon’s delayed quotes showed VOO trading at $711.73 and SCHG at $35.96. Neither stretch tells you which fund will lead next.

How Each Fund Picks Its Stocks

Both funds are passive index trackers, so the choice between them comes down to which index you want to own, and VOO tracks the S&P 500, a broad basket of large U.S. companies across every major industry. SCHG tracks the Dow Jones U.S. Large-Cap Growth Total Stock Market Index. It picks growth stocks from among the 750 largest U.S. companies by market value.

That screen makes SCHG narrower and more focused. It owns only the part of the large-cap market that meets its growth criteria and leaves out the rest, while VOO owns the whole large-cap universe in one fund.

Concentration Risk Runs in Both Directions

A narrower growth fund can swing harder than a broad market fund, both up and down. SCHG’s ten-year result reflects a period that rewarded growth stocks. Committing to it for the long term means you are counting on that pattern continuing, or at least on it not turning badly. When growth falls out of favor, a fund built only from growth stocks has less to buffer it than one that also holds the rest of the market.

Switching Without Handing Over Your Gains

If you have held VOO in a non-retirement account through this decade, you likely have large unrealized gains. Selling to buy SCHG could trigger a sizable capital gains tax bill, which would eat into any edge the switch might deliver. A few cleaner options:

• Starting with tax-advantaged accounts. Swaps inside an IRA or 401(k) create no current tax bill.
• Directing new money to SCHG. Some investors keep existing VOO shares in place and send future contributions to the growth fund instead.
• Splitting the position. Keeping VOO as your core and adding SCHG as a growth tilt limits how much depends on growth stocks continuing to lead.

Who Should Consider SCHG, and Who Should Stay With VOO

SCHG suits investors holding for a decade or more. They must be able to watch it trail the market for years at a time, as it has over the past year, without selling. VOO may be a closer fit for some. This is true for investors who want the broadest exposure to large U.S. companies, or who would be uncomfortable with a focused growth fund falling behind. The ten-year record argues for considering SCHG, and the five-year and one-year records show the cost of that choice. Time horizon and tolerance for concentration are the key factors, and the 134.2-point headline gap works best as context only.

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