Allocation using Schwab ETFs

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Topic Author
Don46
Posts: 198
Joined: Sun Feb 24, 2013 5:53 pm

Allocation using Schwab ETFs

Post by Don46 »

I'm making the transition from a managed account to what will be a three fund allocation of 35% US Stocks/ 50% US Bonds/ 15% International Stocks. I have been in a Schwab account for twenty years or more and am inclined to stay with them. I am considering using the following Schwab ETFs:

SCHF for international at .09 ER
SCHB for US stocks at .04 ER
SCHZ for US bonds at .05 ER

I have a taxable account at about $1.9 million (I'll set aside $200k for immediate expenses and emergency fund). Most of the rest will be allocated to the US Stocks, International Stocks, and some US Bonds.
I have an IRA at about $1.25 million that will be entirely in US bonds.
I have two tax deferred accounts outside Schwab and in employee retirement plans with a more limited array of funds to choose from. At present I have about $.5 million and have both accounts in all in one funds now at about 45/55 stocks and bonds. I will roll those into the Schwab IRA in two or three more years after I retire.
What are the Bogleheads' views on these Schwab ETFs? I've read the pros and cons on the Wiki and in the _Bogleheads' Guide to Investing_ (a great book, let me add) and the low ERs keep leading me to the Schwab ETFs.
I welcome your advice.
--Don
Last edited by Don46 on Sat Dec 07, 2013 11:50 am, edited 1 time in total.
stlutz
Posts: 5585
Joined: Fri Jan 02, 2009 12:08 am

Re: Allocation using Schwab ETFs

Post by stlutz »

If you like Schwab, those ETFs are fine. However, given the high dollar amounts involved, you should not make ETF selections based on whether or not you have to pay a $9 brokerage commission. VTI, VXUS, and BND are all marginally better because they hold more securities and thus better represent the "total" market. Additionally, they trade with smaller spreads than the Schwab funds do. When you are investing hundreds of thousands of dollars, spreads are more important to worry about than the commission.
Topic Author
Don46
Posts: 198
Joined: Sun Feb 24, 2013 5:53 pm

Re: Allocation using Schwab ETFs

Post by Don46 »

stlutz wrote:If you like Schwab, those ETFs are fine. However, given the high dollar amounts involved, you should not make ETF selections based on whether or not you have to pay a $9 brokerage commission. VTI, VXUS, and BND are all marginally better because they hold more securities and thus better represent the "total" market. Additionally, they trade with smaller spreads than the Schwab funds do. When you are investing hundreds of thousands of dollars, spreads are more important to worry about than the commission.
I agree; the brokerage commissions are inconsequential. I was just looking at the annual ER for each. I'll take a good look at these funds now. Thank you.
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