The Vanguard Total Stock Market Index Fund ETF Shares (VTI) and the Schwab U.S. Small-Cap ETF (SCHA) are both among the Top 100 ETFs. VTI is a Vanguard Large Blend fund and SCHA is a Schwab ETFs Small Blend fund. So, what’s the difference between VTI and SCHA? And which fund is better?
The expense ratio of VTI is 0.01 percentage points lower than SCHA’s (0.03% vs. 0.04%). VTI also has a higher exposure to the technology sector and a lower standard deviation. Overall, VTI has provided higher returns than SCHA over the past ten years.
In this article, we’ll compare VTI vs. SCHA. We’ll look at holdings and industry exposure, as well as at their performance and portfolio growth. Moreover, I’ll also discuss VTI’s and SCHA’s fund composition, risk metrics, and annual returns and examine how these affect their overall returns.
Summary
| VTI | SCHA | |
| Name | Vanguard Total Stock Market Index Fund ETF Shares | Schwab U.S. Small-Cap ETF |
| Category | Large Blend | Small Blend |
| Issuer | Vanguard | Schwab ETFs |
| AUM | 1.26T | 16.51B |
| Avg. Return | 14.70% | 12.62% |
| Div. Yield | 1.26% | 0.98% |
| Expense Ratio | 0.03% | 0.04% |
The Vanguard Total Stock Market Index Fund ETF Shares (VTI) is a Large Blend fund that is issued by Vanguard. It currently has 1.26T total assets under management and has yielded an average annual return of 14.70% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.03%.
The Schwab U.S. Small-Cap ETF (SCHA) is a Small Blend fund that is issued by Schwab ETFs. It currently has 16.51B total assets under management and has yielded an average annual return of 12.62% over the past 10 years. The fund has a dividend yield of 0.98% with an expense ratio of 0.04%.
VTI’s dividend yield is 0.28% higher than that of SCHA (1.26% vs. 0.98%). Also, VTI yielded on average 2.07% more per year over the past decade (14.70% vs. 12.62%). The expense ratio of VTI is 0.01 percentage points lower than SCHA’s (0.03% vs. 0.04%).
Fund Composition
Industry Exposure
| VTI | SCHA | |
| Technology | 24.1% | 14.91% |
| Industrials | 9.39% | 15.37% |
| Energy | 2.77% | 3.35% |
| Communication Services | 10.4% | 3.5% |
| Utilities | 2.29% | 1.83% |
| Healthcare | 13.64% | 16.5% |
| Consumer Defensive | 5.77% | 3.75% |
| Real Estate | 3.59% | 7.83% |
| Financial Services | 13.77% | 14.49% |
| Consumer Cyclical | 11.83% | 14.48% |
| Basic Materials | 2.44% | 3.98% |
The Vanguard Total Stock Market Index Fund ETF Shares (VTI) has the most exposure to the Technology sector at 24.1%. This is followed by Financial Services and Healthcare at 13.77% and 13.64% respectively. Basic Materials (2.44%), Energy (2.77%), and Real Estate (3.59%) only make up 8.80% of the fund’s total assets.
VTI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.77%, 9.39%, 10.4%, 11.83%, and 13.64%.
The Schwab U.S. Small-Cap ETF (SCHA) has the most exposure to the Healthcare sector at 16.5%. This is followed by Industrials and Technology at 15.37% and 14.91% respectively. Energy (3.35%), Communication Services (3.5%), and Consumer Defensive (3.75%) only make up 10.60% of the fund’s total assets.
SCHA’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Technology stocks at 3.98%, 7.83%, 14.48%, 14.49%, and 14.91%.
VTI is 9.19% more exposed to the Technology sector than SCHA (24.1% vs 14.91%). VTI’s exposure to Financial Services and Healthcare stocks is 0.72% lower and 2.86% lower respectively (13.77% vs. 14.49% and 13.64% vs. 16.5%). In total, Basic Materials, Energy, and Real Estate also make up 6.36% less of the fund’s holdings compared to SCHA (8.80% vs. 15.16%).
Holdings
| VTI Holdings | Weight |
| Apple Inc | 4.9% |
| Microsoft Corp | 4.6% |
| Amazon.com Inc | 3.33% |
| Facebook Inc Class A | 1.88% |
| Alphabet Inc Class A | 1.66% |
| Alphabet Inc Class C | 1.56% |
| Tesla Inc | 1.18% |
| Berkshire Hathaway Inc Class B | 1.09% |
| NVIDIA Corp | 1.07% |
| JPMorgan Chase & Co | 1.06% |
VTI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 4.9%, 4.6%, 3.33%, 1.88%, and 1.66%.
Alphabet Inc Class C (1.56%), Tesla Inc (1.18%), and Berkshire Hathaway Inc Class B (1.09%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VTI’s holdings at 1.07% and 1.06%.
| SCHA Holdings | Weight |
| AMC Entertainment Holdings Inc Class A | 0.67% |
| Caesars Entertainment Inc | 0.51% |
| Cloudflare Inc | 0.48% |
| NovoCure Ltd | 0.45% |
| Plug Power Inc | 0.41% |
| 10x Genomics Inc Ordinary Shares – Class A | 0.34% |
| GameStop Corp Class A | 0.28% |
| RH | 0.27% |
| Penn National Gaming Inc | 0.27% |
| Axon Enterprise Inc | 0.27% |
SCHA’s Top Holdings are AMC Entertainment Holdings Inc Class A, Caesars Entertainment Inc, Cloudflare Inc, NovoCure Ltd, and Plug Power Inc at 0.67%, 0.51%, 0.48%, 0.45%, and 0.41%.
10x Genomics Inc Ordinary Shares – Class A (0.34%), GameStop Corp Class A (0.28%), and RH (0.27%) have a slightly smaller but still significant weight. Penn National Gaming Inc and Axon Enterprise Inc are also represented in the SCHA’s holdings at 0.27% and 0.27%.
Performance
Annual Returns
| Year | VTI | SCHA |
| 2020 | 20.95% | 19.35% |
| 2019 | 30.8% | 26.54% |
| 2018 | -5.13% | -11.75% |
| 2017 | 21.16% | 15.04% |
| 2016 | 12.68% | 19.88% |
| 2015 | 0.4% | -4.24% |
| 2014 | 12.56% | 6.53% |
| 2013 | 33.51% | 39.59% |
| 2012 | 16.41% | 18.24% |
| 2011 | 1.06% | -2.95% |
| 2010 | 17.26% | 28.31% |
VTI had its best year in 2013 with an annual return of 33.51%. VTI’s worst year over the past decade yielded -5.13% and occurred in 2018. In most years the Vanguard Total Stock Market Index Fund ETF Shares provided moderate returns such as in 2016, 2012, and 2010 where annual returns amounted to 12.68%, 16.41%, and 17.26% respectively.
The year 2013 was the strongest year for SCHA, returning 39.59% on an annual basis. The poorest year for SCHA in the last ten years was 2018, with a yield of -11.75%. Most years the Schwab U.S. Small-Cap ETF has given investors modest returns, such as in 2017, 2012, and 2020, when gains were 15.04%, 18.24%, and 19.35% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VTI | $10,000 | $36,370 | 14.70% |
| SCHA | $10,000 | $30,035 | 12.62% |
A $10,000 investment in VTI would have resulted in a final balance of $36,370. This is a profit of $26,370 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.70%.
With a $10,000 investment in SCHA, the end total would have been $30,035. This equates to a $20,035 profit over 10 years and a compound annual growth rate (CAGR) of 12.62%.
VTI’s CAGR is 2.07 percentage points higher than that of SCHA and as a result, would have yielded $6,335 more on a $10,000 investment. Thus, VTI outperformed SCHA by 2.07% annually.
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