Investors often seek the best exchange-traded funds (ETFs) to gain exposure to the U.S. stock market. Among the popular options are the Schwab U.S. Broad Market ETF (SCHB) and the Vanguard Total Stock Market ETF (VTI). While closely resembling each other in numerous aspects, these funds have some key differences that investors should consider.
Overview of SCHB and VTI
Both SCHB and VTI aim to provide comprehensive exposure to the entire U.S. stock market. They feature a low expense ratio of 0.03%, making them economically appealing to investors. The funds also share a dividend yield of 1.14%.
Performance Metrics Snapshot
| Metric | SCHB | VTI |
|---|---|---|
| 1-Year Return (as of Nov. 17, 2025) | 13.54% | 13.66% |
| Assets Under Management (AUM) | $37.35 billion | $2.02 trillion |
| Number of Stocks | 2,435 | 3,529 |
| Max Drawdown (5 years) | -25.40% | -25.36% |
Key Differences
One of the most significant distinctions between SCHB and VTI is the number of stocks they hold. VTI has approximately 1,000 more stocks, leading to potentially greater diversification. Additionally, VTI’s AUM is substantially larger than SCHB’s, an important factor for many investors.
Sector Allocation
Both ETFs feature similar sector allocations reflective of the U.S. market:
- Technology: 34%
- Financial Services: 13%
- Consumer Cyclicals: 11%
Their largest holdings include major companies such as Nvidia, Microsoft, and Apple, each accounting for less than 10% of the total assets. This ensures that no single stock overpowers the portfolio.
Investment Considerations
When choosing between SCHB and VTI, investors should evaluate factors beyond just expense ratios and yields. The higher AUM and broader range in VTI can be advantageous for those prioritizing diversification. Nevertheless, both funds offer thousands of stocks across various sectors, meeting the diversification needs of the average investor.
Ultimately, whether VTI or SCHB is the better option depends on individual investment objectives. Both ETFs serve as solid building blocks for a diversified investment portfolio.
For further insights on ETF investing, continue exploring resources available at El-Balad.
