The Vanguard Total Stock Market Index Fund ETF Shares (VTI) and the Schwab U.S. Large-Cap ETF (SCHX) are both among the Top 100 ETFs. VTI is a Vanguard Large Blend fund and SCHX is a Schwab ETFs Large Blend fund. So, what’s the difference between VTI and SCHX? And which fund is better?
VTI and SCHX 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 SCHX over the past ten years.
In this article, we’ll compare VTI vs. SCHX. We’ll look at performance and holdings, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss VTI’s and SCHX’s industry exposure, risk metrics, and fund composition and examine how these affect their overall returns.
Summary
| VTI | SCHX | |
| Name | Vanguard Total Stock Market Index Fund ETF Shares | Schwab U.S. Large-Cap ETF |
| Category | Large Blend | Large Blend |
| Issuer | Vanguard | Schwab ETFs |
| AUM | 1.26T | 30.89B |
| Avg. Return | 14.70% | 14.60% |
| Div. Yield | 1.26% | 1.41% |
| 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. Large-Cap ETF (SCHX) is a Large Blend fund that is issued by Schwab ETFs. It currently has 30.89B total assets under management and has yielded an average annual return of 14.60% over the past 10 years. The fund has a dividend yield of 1.41% with an expense ratio of 0.03%.
VTI’s dividend yield is 0.15% lower than that of SCHX (1.26% vs. 1.41%). Also, VTI yielded on average 0.09% more per year over the past decade (14.70% vs. 14.60%). VTI and SCHX have the same expense ratio: 0.03%.
Fund Composition
Industry Exposure
| VTI | SCHX | |
| Technology | 24.1% | 25.13% |
| Industrials | 9.39% | 8.65% |
| Energy | 2.77% | 2.72% |
| Communication Services | 10.4% | 11.26% |
| Utilities | 2.29% | 2.37% |
| Healthcare | 13.64% | 13.04% |
| Consumer Defensive | 5.77% | 5.97% |
| Real Estate | 3.59% | 3.13% |
| Financial Services | 13.77% | 13.82% |
| Consumer Cyclical | 11.83% | 11.63% |
| Basic Materials | 2.44% | 2.28% |
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. Large-Cap ETF (SCHX) has the most exposure to the Technology sector at 25.13%. This is followed by Financial Services and Healthcare at 13.82% and 13.04% respectively. Utilities (2.37%), Energy (2.72%), and Real Estate (3.13%) only make up 8.22% of the fund’s total assets.
SCHX’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.65%, 11.26%, 11.63%, and 13.04%.
VTI is 1.03% less exposed to the Technology sector than SCHX (24.1% vs 25.13%). VTI’s exposure to Financial Services and Healthcare stocks is 0.05% lower and 0.60% higher respectively (13.77% vs. 13.82% and 13.64% vs. 13.04%). In total, Basic Materials, Energy, and Real Estate also make up 0.67% more of the fund’s holdings compared to SCHX (8.80% vs. 8.13%).
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%.
| SCHX Holdings | Weight |
| Apple Inc | 5.37% |
| Microsoft Corp | 5.1% |
| Amazon.com Inc | 3.69% |
| Facebook Inc A | 2.08% |
| Alphabet Inc A | 1.84% |
| Alphabet Inc Class C | 1.78% |
| Berkshire Hathaway Inc Class B | 1.32% |
| Tesla Inc | 1.31% |
| NVIDIA Corp | 1.25% |
| JPMorgan Chase & Co | 1.18% |
SCHX’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 5.37%, 5.1%, 3.69%, 2.08%, and 1.84%.
Alphabet Inc Class C (1.78%), Berkshire Hathaway Inc Class B (1.32%), and Tesla Inc (1.31%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHX’s holdings at 1.25% and 1.18%.
Risk Analysis
| VTI | SCHX | |
| Mean Return | 1.23 | 1.24 |
| R-squared | 99.24 | 99.83 |
| Std. Deviation | 14.15 | 13.8 |
| Alpha | -0.57 | -0.14 |
| Beta | 1.04 | 1.02 |
| Sharpe Ratio | 1 | 1.03 |
| Treynor Ratio | 13.58 | 14.06 |
The Vanguard Total Stock Market Index Fund ETF Shares (VTI) has a Mean Return of 1.23 with a Standard Deviation of 14.15 and a Alpha of -0.57. Its Beta is 1.04 while VTI’s Treynor Ratio is 13.58. Furthermore, the fund has a R-squared of 99.24 and a Sharpe Ratio of 1.
The Schwab U.S. Large-Cap ETF (SCHX) has a Standard Deviation of 13.8 with a Mean Return of 1.24 and a Treynor Ratio of 14.06. Its Sharpe Ratio is 1.03 while SCHX’s Beta is 1.02. Furthermore, the fund has a R-squared of 99.83 and a Alpha of -0.14.
VTI’s Mean Return is 0.01 points lower than that of SCHX and its R-squared is 0.59 points lower. With a Standard Deviation of 14.15, VTI is slightly more volatile than SCHX. The Alpha and Beta of VTI are 0.43 points lower and 0.02 points higher than SCHX’s Alpha and Beta.
Performance
Annual Returns
| Year | VTI | SCHX |
| 2020 | 20.95% | 20.9% |
| 2019 | 30.8% | 31.4% |
| 2018 | -5.13% | -4.52% |
| 2017 | 21.16% | 21.91% |
| 2016 | 12.68% | 11.78% |
| 2015 | 0.4% | 1.02% |
| 2014 | 12.56% | 13.33% |
| 2013 | 33.51% | 32.54% |
| 2012 | 16.41% | 16.06% |
| 2011 | 1.06% | 1.61% |
| 2010 | 17.26% | 15.88% |
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 SCHX, returning 32.54% on an annual basis. The poorest year for SCHX in the last ten years was 2018, with a yield of -4.52%. Most years the Schwab U.S. Large-Cap ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.33%, 15.88%, and 16.06% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| VTI | $10,000 | $36,370 | 14.70% |
| SCHX | $10,000 | $36,987 | 14.60% |
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 SCHX, the end total would have been $36,987. This equates to a $26,987 profit over 10 years and a compound annual growth rate (CAGR) of 14.60%.
VTI’s CAGR is 0.09 percentage points higher than that of SCHX and as a result, would have yielded $617 less on a $10,000 investment. Thus, VTI outperformed SCHX by 0.09% 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.
