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SCHB vs VTI: Which Broad Market ETF Is Best?

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We Compare SCHB vs VTI:

We are going to explore the difference between Schwab U.S. Broad Market ETF (SCHB) vs Vanguard Total Stock Market ETF (VTI)

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

SCHB vs VTI Graphic

 

SCHB vs VTI

The primary difference between SCHB and VTI is the company that offers the exchange-traded fund (ETF).  SCHB is offered by Charles Schwab, while Vanguard offers VTI.

They also track different indexes.  For example, SCHB tracks the Dow Jones U.S. Broad Stock Market Index while VTI tracks the CRSP US Total Market Index.

Another significant difference is the number of stocks in each, with VTI having 3,535 different companies in the index compared to 2,551 with SCHB.

Charles Schwab offers SCHB.

Vanguard offers VTI.

VTI and SCHB have the same expense ratio of 0.03%, making them 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: 2,551

VTI

  • Fund Inception: 2000
  • Offered By Vanguard
  • Tracks the CRSP US Total Market Index
  • Expense Ratio: 0.03%
  • Number Of Stocks: 3,535
  • Admiral Shares (VTSAX)

 

SCHB vs VTI Performance

SCHB and VTI have had almost identical performance returns over the last 10 years, with VTI barely beating SCHB by 0.02% annually.

Here is how their performance compares:

SCHB vs VTI Performance

Here is another comparison of short-term performance:

SCHB vs VTI Short Term Performance

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

This performance is because they both aim to have the same market exposure.

 

SCHB vs VTI Holdings

There is a significant difference in the number of holdings for SCHB and VTI.  SCHB includes 2,551 stocks in the ETF, while VTI holds 3,535 stocks.

VTI holds more companies compared to SCHB.

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

However, VTI has slightly more diversification due to its 3,535 holdings than only 2,551 with SCHB.

VTI and SCHB’s top 10 holdings comprise 23% of their assets.

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

SCHB vs VTI Holdings

The only difference between SCHB and VTI’s top 10 holdings is SCHB includes UnitedHealth Group while VTI has Johnson & Johnson.

 

SCHB vs VTI Overlap

There is an overlap between SCHB and VTI that includes 2,344 stocks.  Almost all of the holdings in SCHB are in VTI.  However, only 62% of VTI’s holdings are in SCHB.

Here are SCHB and VTI holdings overlap:

SCHB and VTI Holdings Overlap

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

Overlap By Weight

VTI has more diversification compared to SCHB.

 

VTI and SCHB Differences

The main difference between VTI and SCHB is the company that offers the fund.  SCHB is offered by Schwab, while Vanguard offers VTI.

They also differ in the number of holdings.  VTI holds 3,535 stocks, while SCHB holds 2,551 stocks making it smaller than VTI.

Lastly, VTI provides more liquidity with $1.3 trillion in net assets compared to $21 billion with SCHB.

SCHB vs VTI Comparison Chart

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

Differences between VTI and SCHB:

  • Brokerage (VTI is Vanguard, SCHB is Schwab)
  • Different Number Of Holdings (3,535 vs 2,551)
  • 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: 2551

The Schwab U.S. Broad Market ETF (SCHB) was 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 closely monitors and seeks to replicate the performance of its underlying index, the Dow Jones US Broad Stock Market Index.

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

SCHB Performance Chart

In addition, the ETF gives investors access to over 2500 of the most prominent publicly-traded companies in the United States with 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 a vital factor to consider when 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 comprises Apple, Microsoft, Amazon, Alphabet, and Tesla and provides exposure to over 2,000 stocks.

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

 

No Minimum Investment

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

Typically, 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 VTI due to its high prices per share.

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

  1. Vanguard to invest in VTI or Charles Schwab for SCHB
  2. M1 Finance to invest in either VTI or SCHB.  (Use this link for $100 when you open a new account)

Both of these options are free.  This is important because fees can lower our returns.

M1 Finance is the best option because it lets you purchase VTI, 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)

 

VTI Description

  • Fund Inception: 2000
  • Tracks the CRSP US Total Market Index
  • Expense Ratio: 0.03%
  • Vanguard ETF
  • No Minimum Investment
  • Number Of Stocks: 3,535
  • Admiral Shares (VTSAX)

Vanguard Total Stock Market ETF (VTI) represents nearly 100% of the U.S. equity market.  It also tracks the CRSP U.S. Total Market Index.

Vanguard’s VTI has an expense ratio of 0.03%.

This implies that the fund has limited exposure to several international stocks.

Yet, this does not affect the companies represented in the fund.  Moreover, these stocks have a significant international presence.

 

VTI Performance

Vanguard Total Stock Market ETF (VTI) is famous for many reasons, of which consistent returns are a significant part.

VTI Performance Chart

Its risk level is similar to that of the S&P 500.

VTI vs S&P 500 Performance Chart

 

VTI Holdings

Vanguard’s VTI comprises Apple, Microsoft, Google, Amazon, and Tesla and provides exposure to over 3,500 stocks.

Here are the top 10 holdings for VTI:

VTI Top 10 Holdings

Major sectors in the index include:

  • Technology
  • Healthcare
  • Consumer Services
  • Financials
  • Industrials

The top 10 holdings make up 21% of its total net assets.

 

Which Is Better SCHB or VTI?

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

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

Which is better will likely depend on which brokerage you prefer to use.

Vanguard customers will likely prefer VTI.

Charles Schwab customers will probably select SCHB.

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

VTI has more diversification and less volatility.  It also offers more liquidity, with $1.3 trillion in net assets.

Considering costs and fees is important 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.

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

 

Is VTI or SCHB Better for Financial Independence?

VTI and SCHB have performed well enough to get you to Financial Independence Retire Early (FIRE).  They have performed excellently over the last 10 years and have low expense ratios.

FIRE Calculator

Calculate Your FI Number With My Free FIRE Calculator

Being part of the FIRE community, we aim for the lowest fees possible and are big fans of Vanguard.

For those reasons, I prefer VTI over SCHB.

Related Posts:

 

My Winner: VTI

My winner is VTI based on the higher diversification and the fact that I love Vanguard.

Vanguard’s VTI offers:

  • Diversification
  • Low Fees
  • Vanguard Fund

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

I would also suggest considering VTI’s Admiral fund VTSAX.

 


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.