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SCHB vs SCHX: Which One Should You Choose?

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We Compare SCHB vs SCHX:

We are going to explore the difference between Schwab U.S. Broad Market ETF (SCHB) vs Schwab U.S. Large-Cap ETF (SCHX)

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

SCHB vs SCHX Graphic

 

SCHB vs SCHX

The main difference between SCHB and SCHX is the index they track. SCHB tracks the Dow Jones U.S. Broad Stock Market Index, while SCHX tracks the Dow Jones U.S. Large-Cap Total Stock Market Index.

Another significant difference is the number of stocks in each ETF. For example, SCHX has 760 companies in the index compared to 2,551 with SCHB.

SCHB holds 2,551 companies

SCHX holds 760 companies

SCHX and SCHB have the same expense ratio of 0.03%, making them both low-cost ETFs.

SCHB

  • Fund Inception: 2009
  • Offered By Charles Schwab
  • Tracks Dow Jones U.S. Broad Stock Market Index
  • Expense Ratio 0.03%
  • Number Of Stocks: 2551

SCHX

  • Fund Inception: 2009
  • Offered By Charles Schwab
  • Tracks Dow Jones U.S. Large-Cap Total Stock Market Index
  • Expense Ratio 0.03%
  • Number Of Stocks: 760

 

SCHB vs SCHX Performance

SCHB and SCHX have had almost identical performance returns over the last 10 years, with SCHX beating SCHB by 0.23%.

Here is how their performance compares:

SCHB vs SCHX Performance

Here is another comparison of short-term performance:

SCHB vs SCHX Performance Chart

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

Similar performance returns occur because SCHX and SCHB have many overlapping holdings.

 

SCHB vs SCHX Holdings

There is a significant difference in the number of holdings for SCHB and SCHX. SCHB holds 2,551 stocks in the ETF, while SCHX holds 760 stocks.

SCHB holds more companies compared to SCHX.

Both funds have similar sector diversification. SCHB is 29% technology which is the same as SCHX.

Yet, SCHB has more diversification due to its 2,551 holdings compared to only 760 with SCHX.

Here are SCHB and SCHX holdings side-by-side:

SCHB vs SCHX Holdings

As you can see, the top 10 holdings for SCHB and SCHX are the same. The only difference is the weight is slightly different for each company.

 

SCHB vs SCHX Overlap

There is an overlap between SCHB and SCHX that includes 743 stocks. All the holdings in SCHX are in SCHB. But, only 31% of SCHB’s holdings are in SCHX.

Here is SCHB and SCHX holdings overlap:

SCHB vs SCHX Holdings Overlap

This overlap means SCHB includes all the holdings in SCHX and many more.

Holdings Overlap By Weight

SCHB has more diversification compared to SCHX.

 

SCHX and SCHB Differences

The main difference between SCHX and SCHB is the number of holdings. SCHX holds 760 stocks, while SCHB holds 2,551 stocks making it larger than SCHX.

SCHX provides more liquidity with $33 billion in net assets compared to $21 billion with SCHB.

SCHB vs SCHX Comparison Chart

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

Differences between SCHX and SCHB:

  • Net Assets
  • Different Number Of Holdings (~760 vs ~2551)
  • Liquidity
  • Tracking Index

 

SCHB Description

  • Fund Inception: 2009
  • Offered By Charles Schwab
  • Tracks Dow Jones U.S. Broad Stock Market Index
  • Expense Ratio 0.03%
  • Number Of Stocks: 2,551

The Schwab U.S. Broad Market ETF (SCHB) launched in 2009 and tracks the Dow Jones US Broad Stock Market Index.

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

It has over $21 billion, making it one of the largest ETFs to track the total U.S. equity market.

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

 

SCHB Performance

SCHB seeks to replicate the performance of the Dow Jones US Broad Stock Market Index.

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

SCHB Performance Chart

In addition, the ETF gives access to over 2,500 of the most prominent publicly-traded companies in the United States. It also provides diversification into all market capitalizations.

SCHB Performance

As you can see, SCHB 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 SCHB a medium-risk choice in its class.

The fund has roughly 2,551 holdings.

Schwab U.S. Broad Market ETF may be a good option for investors looking for total U.S. market exposure.

These include expense ratio, expected asset class return, and momentum.

 

SCHB Costs

Cost is one of the many vital factors to consider in choosing an ETF. 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.

SCHB is one of the cheapest exchange-traded funds, with an expense ratio of 0.03%.

In other words, for a $10,000 investment, the ETF charges you $3 for annual operating expenses.

 

SCHB Holdings

The top 10 holdings for SCHB make up 23% of its total assets.

SCHB Top Holdings

Schwab’s SCHB holds Apple, Microsoft, Amazon, Alphabet, Tesla, and over 2,000 other stocks.

If you are looking for a Schwab fund like SCHB, you can look at the Schwab Total Stock Market Index Fund (SWTSX).

 

No Minimum Investment

SCHB and SCHX are exchange-traded funds (ETFs), so there is no minimum investment. Investors looking to buy fractional shares can use platforms like M1 Finance.

Usually, 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 SCHX due to its high price per share.

There are two easy ways to invest in SCHX or SCHB commission-free.

  1. Charles Schwab for SCHB or SCHX.
  2. M1 Finance to invest in either SCHX or SCHB. (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 SCHX, SCHB, 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 quickly find which of your investments has high fees so 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)

 

SCHX Description

  • Fund Inception: 2009
  • Offered By Charles Schwab
  • Tracks Dow Jones U.S. Large-Cap Total Stock Market Index
  • Expense Ratio 0.03%
  • Number Of Stocks: 760

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

SCHX is passively managed to give investors broad exposure to the 750 largest U.S. companies. Equities include large, mid, and small-cap companies.

It has over $33 billion, making it one of the largest ETFs to track the U.S. equity market.

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

 

SCHX Performance

SCHX seeks to replicate the performance of the Dow Jones U.S. Large-Cap Total Stock Market Index.

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

SCHX Performance Chart

In addition, the ETF gives access to over 700 of the most prominent publicly-traded companies in the United States. It also provides diversification into all market capitalizations but focuses on large-cap companies.

SCHX Performance

As you can see, SCHX 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 SCHX a medium-risk choice in its class.

The fund has roughly 760 holdings.

Schwab U.S. Large-Cap ETF may be a good option for investors looking for Large-Cap U.S. market exposure.

The benefits of this ETF include expense ratio and momentum.

 

SCHX Costs

Cost is one of the many vital factors to consider in choosing an ETF. 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.

SCHX is one of the cheapest exchange-traded funds, with an expense ratio of 0.03%.

In other words, for a $10,000 investment, the ETF charges you $3 for annual operating expenses.

 

SCHX Holdings

The top 10 holdings for SCHX make up 26% of its total assets.

SCHX Holdings

Schwab’s SCHX holds Apple, Microsoft, Amazon, Alphabet, Tesla, and over 700 other stocks.

If you are looking for a Schwab fund like SCHX, you can look at the Schwab Total Stock Market Index Fund (SWTSX).

 

Which Is Better SCHB or SCHX?

SCHB and SCHX are similar investments. They have had the same performance over the last 10 years and have the same expense ratio of 0.03%.

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

Which is better will likely depend on how much diversification you prefer.

More diversification = SCHB

Less diversification = SCHX

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

SCHX offers more liquidity with $33 billion in net assets.

It’s important to consider costs and fees because they can cost you in the long run. That’s why buying and selling your shares commission-free is essential.

Again a great way to do this is with M1 Finance. (Use this link for $50 when you open a new account)

You can purchase fractional shares for free, allowing you to buy SCHX, SCHB, and thousands of other stocks/ETFs.

 

Is SCHX or SCHB Better for Financial Independence?

SCHX and SCHB have performed well enough to get you to Financial Independence Retire Early (FIRE). In addition, they both have performed excellently over the last 10 years and have low expense ratios.

I usually lean towards the ETF with the lowest fees. But, both SCHX and SCHB have the same expense ratio of 0.03%.

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The next factor is diversification. In this case, SCHB wins.

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My Winner: SCHB

My winner is SCHB, based on the higher diversification and lower volatility.

That said, the decision might come down to how much diversification you prefer.

You can also consider Vanguard’s equivalent to SCHB, which is VTI.

Both are low-cost ETFs.

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

 


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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