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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 3535 different companies in the index compared to 2551 with SCHB.

Charles Schwab offers SCHB.

Vanguard offers VTI.

VTI 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

VTI

  • Fund Inception: 2000
  • Offered By Vanguard
  • Tracks the CRSP US Total Market Index
  • Expense Ratio: 0.03%
  • Number Of Stocks: 3535
  • Admiral Shares (VTSAX)

 

SCHB vs VTI Performance

SCHB and VTI have 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 2551 stocks in the ETF, while VTI holds 3535 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 3535 holdings compared to only 2551 with SCHB.

Lastly, VTI and SCHB’s top 10 holdings make up 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 2344 stocks.  Almost all of the holdings in SCHB are in VTI.  However, only 62% of VTI’s holdings are in SCHB.

Here is 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 VTI is offered by Vanguard.

They also differ in the number of holdings.  VTI holds 3535 stocks, while SCHB holds 2551 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 (~3535 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: 2551

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 closely monitors and seeks to replicate the performance of its underlying index, which is 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 2551 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

One of the many vital factors to consider in choosing an ETF is cost.  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 trade 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 is primarily made up of Apple, Microsoft, Amazon, Alphabet, Tesla and provides exposure to over 2000 stocks.

If you are looking for a Schwab fund similar to SCHB, you can take a 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 $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 VTI, SCHB, and thousands of other stocks.

 

VTI Description

  • Fund Inception: 2000
  • Tracks the CRSP US Total Market Index
  • Expense Ratio: 0.03%
  • Vanguard ETF
  • No Minimum Investment
  • Number Of Stocks: 3535
  • Admiral Shares (VTSAX)

Vanguard Total Stock Market ETF (VTI) represents close to 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 in any way 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 so 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 is primarily made up of Apple, Microsoft, Google, Amazon, and Tesla and provides exposure to over 3500 stocks.

Here are the top 10 holdings for VTI:

VTI Top Holdings

Major sectors in the index include:

  • Technology
  • Healthcare
  • Consumer Services
  • Financials
  • Industrials

The top 10 holdings make up 25% 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.

It’s important to consider costs and fees because they can cost you in the long run.  That’s why it’s so important to buy and sell your shares commission-free.

Again a great way to do this is with M1 Finance.

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

 

Is VTI or SCHB Better for Financial Independence?

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

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Being part of the FIRE community, we aim for the lowest fees possible, and we 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.
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