Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

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Jmh04j
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Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by Jmh04j » Fri Jun 22, 2018 2:39 pm

I have been going steady purchasing Schwab total market etf (SCHB) and Schwab International etf (SCHF) every two weeks and decided to mix things up buy buying the Vanguard mutual fund equivalent in my Vanguard taxable account.

I prefer Schwab’s mobile apps and website far more than Vanguards; however the Vanguard mutual funds are terrific. (Tax efficiency, etc. etc.). I rely on the mobile app throughout the day as buying mutual funds while using a work computer is typically frowned upon...

I am in need of some advice about which route to take going forward (Schwab etf or Vanguard mutual fund) for my taxable account. I suppose I could use both but like using only one provider.

Thanks in advance,

Jim

bloom2708
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by bloom2708 » Fri Jun 22, 2018 3:09 pm

I think you went sideways when you wanted to "mix things up". No need really.

Both Total US and Total International stock indexes behave very similar. Similar returns, costs.

Buying the Schwab version and then the Vanguard version just gets you 2 1099-B at year end and adds to your tax complexity.

Pick the one you like best. If that is Schwab, consolidate back to Schwab and use their mobile app. Less is more.
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livesoft
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by livesoft » Fri Jun 22, 2018 3:14 pm

have you thought about automating this every-2-weeks investing? Vanguard.com can set that up for you, so then you wouldn't need an app nor a phone to make your purchases.
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UpperNwGuy
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by UpperNwGuy » Fri Jun 22, 2018 3:22 pm

I hold Total Stock at both Vanguard and Schwab. I like being diversified across two brokerages. I'm pleased with both. I wouldn't consolidate.

Jmh04j
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by Jmh04j » Fri Jun 22, 2018 3:34 pm

Auto investing is not a bad idea but I like a little “market timing” by a day or two depending on what the market is doing.

livesoft
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by livesoft » Fri Jun 22, 2018 3:45 pm

bloom2708 wrote:
Fri Jun 22, 2018 3:09 pm
Buying the Schwab version and then the Vanguard version just gets you 2 1099-B at year end and adds to your tax complexity.
Not really. If the OP makes no sales, then no 1099-B.

I am going to guess you meant 1099-DIV. :)

But even that is not a tax complexity to most people. I have 3 different taxable brokerage accounts. I have not had a 1099-B from my Fidelity account ever. I have not had a 1099-B from my Vanguard account since 2009 and that was from a tax-loss harvesting transaction. Yes, I get dividends, but they get sent to my checking account totally automatically. The 1099-DIVs are trivial to load into tax prep software, too.
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Jmh04j
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by Jmh04j » Mon Aug 27, 2018 6:20 pm

For those that have accounts at Schwab (over Vanguard) with mainly low cost index ETFs; why did you pick that over Vanguard mutual funds?

I understand the value proposition of Vanguard, I am just trying to see if I am missing something on the Schwab side.

aristotelian
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by aristotelian » Mon Aug 27, 2018 6:34 pm

Vanguards move to free ETFs I think gives them a big edge over Schwab for tax loss harvesting, especially on the international side. I did just get 30 free trades from Schwab so for now I am still sticking with them.

HJG0989
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by HJG0989 » Mon Aug 27, 2018 11:38 pm

OP, Fidelity's ETFs don't pay out end of year capital gain distributions. If you buy and hold, this could save you some money.

gostars
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by gostars » Tue Aug 28, 2018 12:30 am

Right now, Schwab would be my 4th choice for taxable investing, after Merrill Edge, Vanguard, and Fidelity. The only real advantage Schwab has over Vanguard is a better website. Fidelity also has a better website, and the range of iShares ETFs they offer is better than what Schwab has. Vanguard now has free trades on almost every ETF, so you can buy whatever and have easy TLH options, but you have to deal with that website. Merrill Edge gives me 100 free trades a month, extra rewards on my B of A credit card, and gave me a big bonus for moving money over; kind of the best of everything.

Jmh04j
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by Jmh04j » Tue Aug 28, 2018 5:00 pm

How is Merrill Edge website/apps and customer service vs. Schwab/Fidelity?

gostars
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by gostars » Tue Aug 28, 2018 11:14 pm

I would rate Schwab as having the best website. M-E I think comes in second, with an edge over Fidelity because I can usually find what I'm looking for without spending much time on it. Fidelity I have to rely on the search way too much to find things other than buying/selling and transferring cash. Vanguard is the worst, because if I go back after not having been in there for 3 months, I can't even figure out how to transfer money out, because the link is only there on one page and in tiny font. I can't say that I use the apps very much because I mostly use the web page. No idea on M-E's customer service; I've never had to call them, and they've only called me twice (account opening and after transfer bonuses posted). About all I can say that would be relevant was that they didn't try to upsell me on anything. They did ask how I planned to invest, and when I said "low-cost index ETFs" they just mentioned the free trades (part of the transfer bonus) and that was it.

Nate79
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by Nate79 » Tue Aug 28, 2018 11:35 pm

Jmh04j wrote:
Mon Aug 27, 2018 6:20 pm
For those that have accounts at Schwab (over Vanguard) with mainly low cost index ETFs; why did you pick that over Vanguard mutual funds?

I understand the value proposition of Vanguard, I am just trying to see if I am missing something on the Schwab side.
Schwab has night and day better customer service including online chat. That plus lower cost and hands down awesome checking account.

limeyx
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by limeyx » Wed Aug 29, 2018 1:01 am

Nate79 wrote:
Tue Aug 28, 2018 11:35 pm
Jmh04j wrote:
Mon Aug 27, 2018 6:20 pm
For those that have accounts at Schwab (over Vanguard) with mainly low cost index ETFs; why did you pick that over Vanguard mutual funds?

I understand the value proposition of Vanguard, I am just trying to see if I am missing something on the Schwab side.
Schwab has night and day better customer service including online chat. That plus lower cost and hands down awesome checking account.
I love Schwab customer service!

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DWesterb2iz2
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by DWesterb2iz2 » Wed Aug 29, 2018 9:13 am

Schwab international, SCHF, is not “total” international, though, is it? It’s a developed market fund, I think. Ok to treat it like VXUS?

Jmh04j
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by Jmh04j » Wed Aug 29, 2018 9:57 am

That is correct. One could supplement by adding the other Schwab International ETFs to replicate VXUS; however, the performance is pretty similar so I only invest in SCHF for my international allocation at Schwab in an effort to “Keep It Simple”

megabad
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by megabad » Wed Aug 29, 2018 10:38 am

OP, are you asking whether or not to prefer Mutual Funds over ETFs? Or are you just asking for a comparison of Schwab and Vanguard as custodians/brokerages? Personally, I would rate Schwab, Fidelity, and Vanguard about equally (poorly) on the knowledge of their assigned agents and support staff which is the most important thing to me. I have witnessed them all screw things up royally. But I don't much care what the website looks like as long as I can figure out how to complete transactions so I can't offer any guidance there. But Vanguard is still the best place I would hold Mutual Funds in taxable in my opinion.

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DWesterb2iz2
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by DWesterb2iz2 » Wed Aug 29, 2018 11:08 am

Jmh04j wrote:
Wed Aug 29, 2018 9:57 am
That is correct. One could supplement by adding the other Schwab International ETFs to replicate VXUS; however, the performance is pretty similar so I only invest in SCHF for my international allocation at Schwab in an effort to “Keep It Simple”
Thank you!

KyleAAA
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by KyleAAA » Wed Aug 29, 2018 11:12 am

The only reason to use both is if you feel safer diversifying brokerage risk (i.e. what if Vanguard disappears?!?!?). Investment-wise, they are close enough to identical to leave it at that. I have Fidelity and Vanguard, but only because my RSUs are transferred to Fidelity on the vest date and it's easier to just hold total market funds there than take the extra step to transfer to my checking account and then to Vanguard.

Jmh04j
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by Jmh04j » Wed Aug 29, 2018 12:28 pm

OP, are you asking whether or not to prefer Mutual Funds over ETFs? Or are you just asking for a comparison of Schwab and Vanguard as custodians/brokerages? Personally, I would rate Schwab, Fidelity, and Vanguard about equally (poorly) on the knowledge of their assigned agents and support staff which is the most important thing to me. I have witnessed them all screw things up royally. But I don't much care what the website looks like as long as I can figure out how to complete transactions so I can't offer any guidance there. But Vanguard is still the best place I would hold Mutual Funds in taxable in my opinion.
To answer you question I am looking for a comparison between the two as custodians/brokerages. I love Vanguard Funds but don’t like the website, app and overall experience as compared to Schwab. I suppose I could look to Merrill Edge but really don’t want to open another account.

For those who left Vanguard for Schwab is the overall user-interface “worth it” for slightly less-good Schwab mutual funds/ETFs?

aristotelian
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by aristotelian » Wed Aug 29, 2018 12:32 pm

There is no substantive investment difference between the two. Personally, I would go with Vanguard now for better tax loss harvesting options now that their platform offers free ETF trading. You can even get the best of both worlds and buy Schwab funds for free through Vanguard. Of course, that may change tomorrow if Schwab expands its free trading.

MnD
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by MnD » Wed Aug 29, 2018 2:23 pm

Jmh04j wrote:
Wed Aug 29, 2018 9:57 am
That is correct. One could supplement by adding the other Schwab International ETFs to replicate VXUS; however, the performance is pretty similar so I only invest in SCHF for my international allocation at Schwab in an effort to “Keep It Simple”
Buying sort of the same things in two different taxable brokerage account providers violates your "keep it simple" credo.
It takes 4 Schwab ETF's to cover total US and total ex-US. If you are an investor with many years ahead of you in the market I wouldn't assume SCHF (which covers only developed markets large cap) is a close enough proxy to total international. The growth is not in that subset of ex-US.

If you want to do something actually useful with your two brokerage model, buy Vanguard emerging market and small cap international funds over at Vanguard in the proper proportion to replicate total ex-US along with SCHF at Schwab.

gostars
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Re: Schwab ETF or Vanguard Mutual Funds (Taxable Account) ?

Post by gostars » Wed Aug 29, 2018 10:09 pm

I believe holding Vanguard emerging market and small cap funds would overweight emerging small caps, since both include them. I think the best approximation of TISM that uses SCHF would be something like 70/20/10 SCHF/VWO/SCHC, since SCHF and SCHC are developed market only, while VWO is all caps of emerging markets, and all are using FTSE indices so they should agree on where Korea is. Using SCHE instead of VWO would eliminate emerging market small caps entirely and would be less accurate of an approximation.

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