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SCHX vs VOO: Which ETF Should You Choose?

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We Compare SCHX vs VOO:

We are going to explore the difference between Schwab U.S. Large-Cap ETF (SCHX) vs Vanguard S&P 500 ETF (VOO)

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

SCHX vs VOO Graphic

 

SCHX vs VOO

The main difference between SCHX and VOO is the company that offers the ETF.  Charles Schwab offers SCHX, while Vanguard offers VOO.

They also track different indexes.  For example, SCHX tracks the Dow Jones U.S. Large-Cap Total Stock Market Index, while VOO tracks the S&P 500 Index.

Another significant difference is the number of stocks in each ETF.  VOO has 508 different companies in the index compared to 760 with SCHX.

Charles Schwab offers SCHX

Vanguard offers VOO

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

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

VOO

  • Fund Inception: 2010
  • Offered By Vanguard
  • Tracks the S&P 500 Index
  • Expense Ratio 0.03%
  • Number Of Stocks: 508
  • Equivalent Admiral Fund (VFIAX)
  • Dividend Yield: 1.31%

 

SCHX vs VOO Performance

SCHX and VOO have had almost identical performance returns over the last 10 years, with VOO beating SCHX by 0.09%.

Here is how their performance compares:

SCHX vs VOO Performance Comparison

Here is another comparison of short term performance:

SCHX vs VOO Performance Chart

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

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

 

SCHX vs VOO Holdings

There is a significant difference in the number of holdings for SCHX and VOO.  SCHX holds 760 stocks in the ETF, while VOO holds 508 stocks.

SCHX holds more companies compared to VOO.

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

Yet, SCHX has more diversification due to its 760 holdings compared to only 508 with VOO.

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

SCHX vs VOO Holdings

VOO and SCHX’s top 10 holdings are the same except for the percent weight of each company.

 

SCHX vs VOO Overlap

There is an overlap between SCHX and VOO that includes 499 stocks.  Almost all the holdings in VOO are in SCHX.  But, only 66% of VOO’s holdings are in SCHX.

Here is SCHX and VOO holdings overlap:

SCHX vs VOO Holdings Overlap

This overlap means SCHX includes the majority of holdings in VOO and many more holdings.

Overlap By Weight

SCHX has more diversification compared to VOO.

 

VOO and SCHX Differences

The main difference between VOO and SCHX is the company that offers the fund.  SCHX is provided by Schwab, while Vanguard provides VOO.

They also differ in the number of holdings.  VOO holds 508 stocks, while SCHX holds 760 stocks making it larger than VOO.

VOO provides more liquidity with $816 billion in net assets compared to $33 billion with SCHX.

SCHX vs VOO Comparison Chart

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

Differences between VOO and SCHX:

  • Brokerage (VOO is Vanguard, SCHX is Schwab)
  • Different Number Of Holdings (508 vs 760)
  • Liquidity
  • Tracking Index

 

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

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.

SCHX 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.

 

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).

 

No Minimum Investment

SCHX and VOO 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 VOO due to its high price per share.

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

  1. Vanguard to invest in VOO or Charles Schwab for SCHX
  2. M1 Finance to invest in either VOO or SCHX.  (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 VOO, SCHX, and thousands of other stocks.

 

VOO Description

  • Fund Inception: 2010
  • Expense Ratio: 0.03%
  • Number Of Stocks: 508
  • Top 10 Holdings: 30%
  • Dividend Yield: 1.31%
  • Equivalent Admiral Fund (VFIAX)

Vanguard S&P 500 ETF (VOO) is a very popular ETF that tracks the S&P 500 index.  VOO has over $841 billion in fund total net assets.

The fund invests in various sectors and has a low expense ratio.

 

VOO Performance

Vanguard’s VOO aims to have the same performance returns as the S&P 500 index.  Therefore, VOO and the S&P 500 should always overlap.

Here is VOO and the S&P 500 Index performance chart:

VOO vs S&P500 Performance Graph

VOO (Blue)                S&P 500 (Yellow)

As you can see, VOO and the S&P 500 overlap in performance.

This should be an expectation in the future.

 

VOO Holdings

VOO Top Holdings

VOO holds Apple, Microsoft, Alphabet, Amazon, Tesla, and over 500 other stocks.

 

Which Is Better SCHX or VOO?

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

SCHX 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 VOO.

Charles Schwab customers will probably choose SCHX.

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

VOO offers more liquidity with $816 billion 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 VOO, SCHX, and thousands of other stocks/ETFs.

 

Is VOO or SCHX Better for Financial Independence?

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

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

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

I’m still a big fan of Vanguard, and I own VOO as a long-term investment.

Related Posts:

 

My Winner: SCHX

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

The decision might come down to which brokerage you prefer to use.

You can also consider other Vanguard ETFs with more diversification like VTI.

All options are low-cost ETFs.

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

I would also suggest considering VOO’s Admiral fund VFIAX.

 


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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