Battle of the Broad Market ETFs: Vanguard's VTI vs. Schwab's SCHB

The Vanguard Total Stock Market ETF (NYSEMKT:VTI) and Schwab U.S. Broad Market ETF (NYSEMKT:SCHB) provide nearly identical exposure to the domestic stock market at the same rock-bottom price point.

Investors often view these two funds as interchangeable building blocks for a core portfolio. Both seek to capture the entire spectrum of the American equity market, ranging from massive tech giants to smaller enterprises, though they follow different underlying indexes to achieve that goal.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

Cost is a wash in this matchup, as both funds charge just 0.03% annually. This high level of affordability means nearly all of the market performance flows directly to the investor. Yields are also currently identical at 1.00%.

Performance & risk comparison

What's inside

The Schwab U.S. Broad Market ETF focuses on the 2,500 largest publicly traded companies in the United States. Its portfolio includes 2,406 holdings, with its largest positions including Nvidia (NASDAQ:NVDA) at 6.94%, Apple (NASDAQ:AAPL) at 5.85%, and Microsoft (NASDAQ:MSFT) at 4.42%. The Schwab fund, launched in 2009, has a trailing-12-month dividend of $0.30 per share and is weighted 31% toward the technology sector.

In comparison, the Vanguard Total Stock Market ETF casts a slightly wider net with 3,598 holdings. Its top holdings include Nvidia at 6.36%, Apple at 5.89%, and Microsoft at 4.34%. Launched in 2001, the Vanguard fund paid $3.77 per share over the trailing 12 months. Despite the larger number of holdings, the two funds share very similar sector weightings, with the Vanguard fund allocating 32% of its portfolio to technology.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investors

Both the Schwab U.S. Broad Market ETF (SCHB) and Vanguard Total Stock Market ETF (VTI) offer investors exposure to thousands of U.S. stocks, making either one a good choice as a foundational component to your portfolio. As they are identical in expense ratio, deciding between the two comes down to other key factors.

SCHB costs significantly less per share than VTI, with a 3-for-1 share split in 2024 contributing to this. However, VTI’s enormous AUM of $2 trillion means it offers traders far more liquidity than SCHB’s $42 billion, resulting in tighter bid-ask spreads and suggesting it is the more popular fund among investors.

In addition, VTI encompasses more holdings, providing better representation of the U.S. stock market, particularly when it comes to smaller businesses, whereas SCHB focuses on the 2,500 largest publicly traded U.S. companies.

If you want broad U.S. stock market exposure and a high AUM for liquidity, VTI is the clear winner against SCHB.

Robert Izquierdo has positions in Apple, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.