The Vanguard Total Stock Market Index Fund ETF Shares (VTI) and the Schwab U.S. TIPS ETF (SCHP) are both among the Top 100 ETFs. VTI is a Vanguard Large Blend fund and SCHP is a Schwab ETFs Inflation-Protected Bond fund. So, what’s the difference between VTI and SCHP? And which fund is better?
The expense ratio of VTI is 0.02 percentage points lower than SCHP’s (0.03% vs. 0.05%). VTI also has a high exposure to the technology sector while SCHP is mostly comprised of AAA bonds. Overall, VTI has provided higher returns than SCHP over the past ten years.
In this article, we’ll compare VTI vs. SCHP. We’ll look at portfolio growth and fund composition, as well as at their risk metrics and industry exposure. Moreover, I’ll also discuss VTI’s and SCHP’s annual returns, holdings, and performance and examine how these affect their overall returns.
Summary
| VTI | SCHP | |
| Name | Vanguard Total Stock Market Index Fund ETF Shares | Schwab U.S. TIPS ETF |
| Category | Large Blend | Inflation-Protected Bond |
| Issuer | Vanguard | Schwab ETFs |
| AUM | 1.26T | 18.41B |
| Avg. Return | 14.70% | 3.92% |
| Div. Yield | 1.26% | 1.97% |
| Expense Ratio | 0.03% | 0.05% |
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. TIPS ETF (SCHP) is a Inflation-Protected Bond fund that is issued by Schwab ETFs. It currently has 18.41B total assets under management and has yielded an average annual return of 3.92% over the past 10 years. The fund has a dividend yield of 1.97% with an expense ratio of 0.05%.
VTI’s dividend yield is 0.71% lower than that of SCHP (1.26% vs. 1.97%). Also, VTI yielded on average 10.78% more per year over the past decade (14.70% vs. 3.92%). The expense ratio of VTI is 0.02 percentage points lower than SCHP’s (0.03% vs. 0.05%).
Fund Composition
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%.
| SCHP Bond Sectors | Weight |
| AAA | 100.0% |
| Others | 0.0% |
| Below B | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| BBB | 0.0% |
| A | 0.0% |
| AA | 0.0% |
| US Government | 0.0% |
SCHP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
Performance
Annual Returns
| Year | VTI | SCHP |
| 2020 | 20.95% | 10.94% |
| 2019 | 30.8% | 8.36% |
| 2018 | -5.13% | -1.31% |
| 2017 | 21.16% | 2.95% |
| 2016 | 12.68% | 4.6% |
| 2015 | 0.4% | -1.5% |
| 2014 | 12.56% | 3.56% |
| 2013 | 33.51% | -8.66% |
| 2012 | 16.41% | 6.83% |
| 2011 | 1.06% | 13.38% |
| 2010 | 17.26% | 0.0% |
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 2011 was the strongest year for SCHP, returning 13.38% on an annual basis. The poorest year for SCHP in the last ten years was 2013, with a yield of -8.66%. Most years the Schwab U.S. TIPS ETF has given investors modest returns, such as in 2017, 2014, and 2016, when gains were 2.95%, 3.56%, and 4.6% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VTI | $10,000 | $36,370 | 14.70% |
| SCHP | $10,000 | $14,418 | 3.92% |
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 SCHP, the end total would have been $14,418. This equates to a $4,418 profit over 10 years and a compound annual growth rate (CAGR) of 3.92%.
VTI’s CAGR is 10.78 percentage points higher than that of SCHP and as a result, would have yielded $21,952 more on a $10,000 investment. Thus, VTI outperformed SCHP by 10.78% annually.
Current recommendations:
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.
I believe that money is just a means to an end: to be free to spend your time as you wish, to maximize your positive impact on the world.
