VFORX vs. SWYGX

Last updated Jun 23, 2026

VFORX (Vanguard Target Retirement 2040 Fund) and SWYGX (Schwab Target 2040 Index Fund) are both Target Retirement Date funds. Over the past 5 years, VFORX returned 8.91%/yr vs 9.08%/yr for SWYGX. With a 0.98 correlation, they move nearly in lockstep. VFORX charges 0.08%/yr vs 0.04%/yr for SWYGX.

Performance

VFORX vs. SWYGX - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Target Retirement 2040 Fund (VFORX) and Schwab Target 2040 Index Fund (SWYGX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

The year-to-date returns for both investments are quite close, with VFORX having a 9.67% return and SWYGX slightly higher at 10.03%.

VFORX

• 1D: 0.96%
• 1M: 1.56%
• YTD: 9.67%
• 6M: 9.59%
• 1Y: 23.37%
• 3Y*: 16.19%
• 5Y*: 8.91%
• 10Y*: 10.68%

SWYGX

• 1D: 0.91%
• 1M: 1.47%
• YTD: 10.03%
• 6M: 9.80%
• 1Y: 23.24%
• 3Y*: 16.09%
• 5Y*: 9.08%
• 10Y*: —

*Multi-year figures are annualized to reflect compound growth (CAGR)

VFORX vs. SWYGX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VFORX Vanguard Target Retirement 2040 Fund	9.67%	18.77%	12.90%	18.56%	-17.00%	14.55%	15.48%	23.86%	-7.32%	18.45%
SWYGX Schwab Target 2040 Index Fund	10.03%	17.57%	12.83%	19.45%	-16.94%	15.68%	14.19%	23.63%	-6.62%	19.12%

Correlation

The correlation between VFORX and SWYGX is 0.99 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.99
Correlation (3Y) Calculated over the trailing 3-year period	0.98
Correlation (5Y) Calculated over the trailing 5-year period	0.98
Correlation (All Time) Calculated using the full available price history since Aug 30, 2016	0.98

The correlation between VFORX and SWYGX has been stable across timeframes, ranging from 0.98 to 0.99 - a consistent structural relationship.

Return for Risk

VFORX vs. SWYGX — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

VFORX

VFORX Risk / Return Rank: 69
VFORX Sharpe Ratio Rank: 70
VFORX Sortino Ratio Rank: 67
VFORX Omega Ratio Rank: 68
VFORX Calmar Ratio Rank: 66
VFORX Martin Ratio Rank: 73

SWYGX

SWYGX Risk / Return Rank: 69
SWYGX Sharpe Ratio Rank: 69
SWYGX Sortino Ratio Rank: 66
SWYGX Omega Ratio Rank: 65
SWYGX Calmar Ratio Rank: 69
SWYGX Martin Ratio Rank: 77

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

VFORX vs. SWYGX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Target Retirement 2040 Fund (VFORX) and Schwab Target 2040 Index Fund (SWYGX). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	VFORX	SWYGX	Difference
Sharpe ratio: Return per unit of total volatility	2.24	2.22	+0.02
Sortino ratio: Return per unit of downside risk	3.11	3.09	+0.02
Omega ratio: Gain probability vs. loss probability	1.42	1.41	+0.01
Calmar ratio: Return relative to maximum drawdown	2.99	3.07	-0.07
Martin ratio: Return relative to average drawdown	12.91	13.49	-0.58

VFORX vs. SWYGX - Sharpe Ratio Comparison

The current VFORX Sharpe Ratio is 2.24, which is comparable to the SWYGX Sharpe Ratio of 2.22. The chart below compares the historical Sharpe Ratios of VFORX and SWYGX, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

VFORX vs. SWYGX - Drawdown Comparison

The maximum VFORX drawdown since its inception was -51.63%, which is greater than SWYGX's maximum drawdown of -27.62%. Use the drawdown chart below to compare losses from any high point for VFORX and SWYGX.

Drawdown Indicators

	VFORX	SWYGX	Difference
Max Drawdown Largest peak-to-trough decline	-51.63%	-27.62%	-24.01%
Max Drawdown (1Y) Largest decline over 1 year	-7.70%	-7.50%	-0.20%
Max Drawdown (3Y) Largest decline over 3 years	-12.12%	-12.96%	+0.84%
Max Drawdown (5Y) Largest decline over 5 years	-24.32%	-24.07%	-0.25%
Max Drawdown (10Y) Largest decline over 10 years	-29.35%	—	—
Current Drawdown Current decline from peak	-0.40%	-0.31%	-0.09%
Average Drawdown Average peak-to-trough decline	-6.76%	-4.16%	-2.60%
Ulcer Index Depth and duration of drawdowns from previous peaks	1.78%	1.70%	+0.08%

Volatility

VFORX vs. SWYGX - Volatility Comparison

Vanguard Target Retirement 2040 Fund (VFORX) and Schwab Target 2040 Index Fund (SWYGX) have volatilities of 4.17% and 4.09%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VFORX	SWYGX	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.17%	4.09%	+0.08%
Volatility (6M) Calculated over the trailing 6-month period	8.57%	8.54%	+0.03%
Volatility (1Y) Calculated over the trailing 1-year period	10.31%	10.36%	-0.05%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	12.52%	13.26%	-0.74%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	13.71%	14.04%	-0.33%

VFORX vs. SWYGX - Expense Ratio Comparison

VFORX has a 0.08% expense ratio, which is higher than SWYGX's 0.04% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

VFORX vs. SWYGX - Dividend Comparison

VFORX's dividend yield for the trailing twelve months is around 2.52%, more than SWYGX's 2.03% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
SWYGX Schwab Target 2040 Index Fund	2.03%	2.23%	2.28%	2.06%	2.03%	1.80%	1.72%	1.95%	2.21%	1.44%	1.13%	0.00%
VFORX Vanguard Target Retirement 2040 Fund	2.52%	2.77%	2.86%	2.38%	2.60%	20.68%	2.06%	2.28%	2.58%	0.04%	2.40%	2.99%

Frequently Asked Questions

Can I hold both VFORX and SWYGX in my portfolio?

With a correlation of 0.99, VFORX and SWYGX move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, VFORX or SWYGX?

VFORX has higher volatility (4.17%) compared to SWYGX (4.09%). In terms of maximum drawdown, VFORX dropped -51.63% vs SWYGX's -27.62%.

Which has better risk-adjusted returns?

VFORX currently has the higher Sharpe Ratio (2.24 vs 2.22), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.