The Vanguard Total Stock Market Index Fund ETF Shares (VTI) and the Schwab U.S. Broad Market ETF (SCHB) are both among the Top 100 ETFs. VTI is a Vanguard Large Blend fund and SCHB is a Schwab ETFs Large Blend fund. So, what’s the difference between VTI and SCHB? And which fund is better?
VTI and SCHB have the same expense ratio: 0.03%. VTI also has a lower exposure to the technology sector and a higher standard deviation. Overall, VTI has provided higher returns than SCHB over the past ten years.
In this article, we’ll compare VTI vs. SCHB. We’ll look at portfolio growth and risk metrics, as well as at their holdings and industry exposure. Moreover, I’ll also discuss VTI’s and SCHB’s performance, annual returns, and fund composition and examine how these affect their overall returns.
Summary
| VTI | SCHB | |
| Name | Vanguard Total Stock Market Index Fund ETF Shares | Schwab U.S. Broad Market ETF |
| Category | Large Blend | Large Blend |
| Issuer | Vanguard | Schwab ETFs |
| AUM | 1.26T | 21.44B |
| Avg. Return | 14.70% | 14.43% |
| Div. Yield | 1.26% | 1.39% |
| Expense Ratio | 0.03% | 0.03% |
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. Broad Market ETF (SCHB) is a Large Blend fund that is issued by Schwab ETFs. It currently has 21.44B total assets under management and has yielded an average annual return of 14.43% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.03%.
VTI’s dividend yield is 0.13% lower than that of SCHB (1.26% vs. 1.39%). Also, VTI yielded on average 0.27% more per year over the past decade (14.70% vs. 14.43%). VTI and SCHB have the same expense ratio: 0.03%.
Fund Composition
Industry Exposure
| VTI | SCHB | |
| Technology | 24.1% | 24.15% |
| Industrials | 9.39% | 9.29% |
| Energy | 2.77% | 2.78% |
| Communication Services | 10.4% | 10.52% |
| Utilities | 2.29% | 2.32% |
| Healthcare | 13.64% | 13.37% |
| Consumer Defensive | 5.77% | 5.76% |
| Real Estate | 3.59% | 3.58% |
| Financial Services | 13.77% | 13.88% |
| Consumer Cyclical | 11.83% | 11.9% |
| Basic Materials | 2.44% | 2.45% |
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. Broad Market ETF (SCHB) has the most exposure to the Technology sector at 24.15%. This is followed by Financial Services and Healthcare at 13.88% and 13.37% respectively. Basic Materials (2.45%), Energy (2.78%), and Real Estate (3.58%) only make up 8.81% of the fund’s total assets.
SCHB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.76%, 9.29%, 10.52%, 11.9%, and 13.37%.
VTI is 0.05% less exposed to the Technology sector than SCHB (24.1% vs 24.15%). VTI’s exposure to Financial Services and Healthcare stocks is 0.11% lower and 0.27% higher respectively (13.77% vs. 13.88% and 13.64% vs. 13.37%). In total, Basic Materials, Energy, and Real Estate also make up 0.01% less of the fund’s holdings compared to SCHB (8.80% vs. 8.81%).
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%.
| SCHB Holdings | Weight |
| Apple Inc | 4.86% |
| Microsoft Corp | 4.61% |
| Amazon.com Inc | 3.33% |
| Facebook Inc A | 1.88% |
| Alphabet Inc A | 1.66% |
| Alphabet Inc Class C | 1.61% |
| Berkshire Hathaway Inc Class B | 1.19% |
| Tesla Inc | 1.18% |
| NVIDIA Corp | 1.13% |
| JPMorgan Chase & Co | 1.06% |
SCHB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 4.86%, 4.61%, 3.33%, 1.88%, and 1.66%.
Alphabet Inc Class C (1.61%), Berkshire Hathaway Inc Class B (1.19%), and Tesla Inc (1.18%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHB’s holdings at 1.13% and 1.06%.
Performance
Annual Returns
| Year | VTI | SCHB |
| 2020 | 20.95% | 20.77% |
| 2019 | 30.8% | 30.94% |
| 2018 | -5.13% | -5.25% |
| 2017 | 21.16% | 21.18% |
| 2016 | 12.68% | 12.56% |
| 2015 | 0.4% | 0.45% |
| 2014 | 12.56% | 12.67% |
| 2013 | 33.51% | 33.37% |
| 2012 | 16.41% | 16.22% |
| 2011 | 1.06% | 1.4% |
| 2010 | 17.26% | 17.1% |
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 SCHB, returning 33.37% on an annual basis. The poorest year for SCHB in the last ten years was 2018, with a yield of -5.25%. Most years the Schwab U.S. Broad Market ETF has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 12.67%, 16.22%, and 17.1% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VTI | $10,000 | $36,370 | 14.70% |
| SCHB | $10,000 | $36,354 | 14.43% |
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 SCHB, the end total would have been $36,354. This equates to a $26,354 profit over 10 years and a compound annual growth rate (CAGR) of 14.43%.
VTI’s CAGR is 0.27 percentage points higher than that of SCHB and as a result, would have yielded $16 more on a $10,000 investment. Thus, VTI outperformed SCHB by 0.27% annually.
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