2,400 Stocks or 315 Value Picks: Is SCHB or VTV a Better Fit for Your Portfolio?

The key difference between Schwab U.S. Broad Market ETF (NYSEMKT:SCHB) and Vanguard Value ETF (NYSEMKT:VTV) is that SCHB offers broader market coverage, while VTV provides a higher income stream.

Both funds aim to deliver low-cost, diversified U.S. equity exposure, but their approaches diverge. SCHB tracks the entire U.S. stock market, resulting in heavy technology exposure, while VTV targets large-cap value stocks, emphasizing financials, healthcare, and industrials. Here’s how they stack up for investors comparing broad-market breadth to value-style focus.

Snapshot (cost & size)

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

SCHB is slightly more affordable on fees, but VTV’s yield is about 0.9 percentage points higher, which may appeal to income-focused investors willing to pay a marginally higher expense ratio for a bigger payout.

Performance & risk comparison

What's inside

Vanguard Value ETF (NYSEMKT:VTV) holds around 315 stocks, tracking large-cap value names with a tilt toward financial services (25%), healthcare (15%), and industrials (13%). Top positions include JPMorgan Chase (NYSE:JPM), Berkshire Hathaway (NYSE: BRK.B), and Johnson & Johnson (NYSE:JNJ). The fund is nearly 22 years old, giving it a long-term track record for value-style U.S. equity exposure.

By contrast, Schwab U.S. Broad Market ETF (NYSEMKT:SCHB) leans into technology (34%), financial services (14%), and consumer cyclicals (11%), with Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT) among its largest holdings. SCHB’s broader universe covers over 2,400 stocks, capturing a wider range of market caps and sector exposures, resulting in higher growth and volatility versus VTV’s value focus.

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What this means for investors

While both of these ETFs have produced similar returns over the last year, there are some key differences to note. SCHB tracks the Dow Jones U.S. Broad Stock Market Index, giving you access to roughly 2,400 companies spanning large-, mid-, and small-cap stocks. With an ultra-low 0.03% expense ratio and 1.1% dividend yield, it holds $38.28 billion in assets. This comprehensive approach means you'll own everything from tech giants to small industrial firms, creating a portfolio that essentially mirrors the entire U.S. equity market in a single ticker.

VTV takes a more selective path, tracking the CRSP US Large Cap Value Index with about 300 holdings. Its 0.04% expense ratio matches SCHB's rock-bottom fees, but its 2.05% dividend yield stands out -- nearly double SCHB's payout. With a massive $215.53 billion in assets, VTV's largest holdings include Berkshire Hathaway and JPMorgan Chase, established industry leaders trading at reasonable valuations.

Ultimately, the winner depends on your investment goals. SCHB captures the entire market's growth potential with balanced sector exposure, while VTV focuses on established companies trading at attractive valuations. VTV suits income-focused investors seeking higher dividends, while SCHB works better for those wanting complete market representation in a single fund.

Glossary

ETF: Exchange-traded fund; a fund that trades on stock exchanges and holds a basket of assets.
Expense ratio: The annual fee charged by a fund, expressed as a percentage of assets under management.
Dividend yield: Annual dividends paid by a fund or stock, shown as a percentage of its price.
Beta: A measure of an investment's volatility compared to the overall market, typically the S&P 500.
AUM: Assets under management; the total market value of assets a fund manages for investors.
Max drawdown: The largest percentage drop from a fund’s peak value to its lowest point over a specific period.
Large-cap: Companies with large market capitalizations, generally considered more stable and established.
Value stocks: Stocks considered undervalued based on financial metrics, often with lower prices relative to earnings or assets.
Growth of $1,000: The increase in value of a $1,000 investment over a set period, including reinvested dividends.
Sector exposure: The proportion of a fund’s assets invested in specific industries, such as technology or healthcare.
Broad market coverage: A fund’s strategy of investing across a wide range of companies and sectors in the market.
Volatility: The degree of variation in an investment's price over time, indicating risk level.

Sara Appino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Index Funds - Vanguard Value ETF. The Motley Fool has a disclosure policy.