Schwab 25% Cheaper than Vanguard?

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Stormbringer
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Schwab 25% Cheaper than Vanguard?

Post by Stormbringer » Sun Dec 10, 2017 10:53 am

I noticed that Schwab's U.S. Broad Market ETF (SCHB) is now 25% less expensive (.03% vs .04%) than Vanguard's Total Stock Market ETF(VTI).

Is there a catch?
Is there a meaningful difference between the funds?
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TheTimeLord
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Re: Schwab 25% Cheaper than Vanguard?

Post by TheTimeLord » Sun Dec 10, 2017 10:56 am

Stormbringer wrote:
Sun Dec 10, 2017 10:53 am
I noticed that Schwab's U.S. Broad Market ETF (SCHB) is now 25% less expensive (.03% vs .04%) than Vanguard's Total Stock Market ETF(VTI).

Is there a catch?
Is there a meaningful difference between the funds?
Is the difference in expenses meaningful?
You left off a very important question.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

mcraepat9
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Re: Schwab 25% Cheaper than Vanguard?

Post by mcraepat9 » Sun Dec 10, 2017 11:01 am

TheTimeLord has flagged the key question here... the answer is no.
Amateur investors are not cool-headed logicians.

radiowave
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Re: Schwab 25% Cheaper than Vanguard?

Post by radiowave » Sun Dec 10, 2017 11:17 am

Also, VTI has 3599 vs 1977 total holdings (bonds) for SCHB and $635 billion in assets compared to $11 billion for SCHB.
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Doc
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Re: Schwab 25% Cheaper than Vanguard?

Post by Doc » Sun Dec 10, 2017 11:28 am

Code: Select all

Size	% of Portfolio	Benchmark
Giant		41.64	41.52
Large		29.84	30.58
Medium		19.32	19.21
Small		6.62	6.92
Micro		2.58	1.77
Stormbringer wrote:
Sun Dec 10, 2017 10:53 am
Is there a meaningful difference between the funds?
No.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

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jhfenton
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Re: Schwab 25% Cheaper than Vanguard?

Post by jhfenton » Sun Dec 10, 2017 11:45 am

Stormbringer wrote:
Sun Dec 10, 2017 10:53 am
I noticed that Schwab's U.S. Broad Market ETF (SCHB) is now 25% less expensive (.03% vs .04%) than Vanguard's Total Stock Market ETF(VTI).

Is there a catch?
Is there a meaningful difference between the funds?
Over the last 12 months, $10,000 in invested in SCHB would have grown to $2.04 more than $10,000 in VTI. Over the last 3 years, VTI is $9.56 ahead (per $10,000).

They are completely interchangeable funds. Buy whichever is free at your brokerage. (Or buy the equivalent that is free at your brokerage.)

drummerboy
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Re: Schwab 25% Cheaper than Vanguard?

Post by drummerboy » Sun Dec 10, 2017 12:17 pm

If you are a Vanguard customer (hold your assets at their brokerage), then use Vanguard funds.

If you are a Schwab customer (hold your assets at their brokerage), you might want to consider SCHB. You can buy/sell with no commission and the spreads are low.

The low ER on the Schwab account is to attract people to Schwab. I'm glad to see competition between all the big brokerages, lowers the ERs for all of us!

flyingaway
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Re: Schwab 25% Cheaper than Vanguard?

Post by flyingaway » Sun Dec 10, 2017 12:34 pm

I am considering to be "attracted" to Schwab for their no fee debit card.

retiredjg
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Re: Schwab 25% Cheaper than Vanguard?

Post by retiredjg » Sun Dec 10, 2017 1:25 pm

Stormbringer wrote:
Sun Dec 10, 2017 10:53 am
Is there a catch?
Probably not directly, but it seems like a marketing gimmick to me.

Is there a meaningful difference between the funds?
Unlikely.


The real question is whether that "25% lower" is meaningful. If you have $100,000 invested, the difference will be $10 a year. That is certainly no reason to pick Schwab over Vanguard. Like I said....marketing gimmick.

If you want to use Schwab, you should use Schwab. It's a fine company. But don't let meaningless stuff like this affect your decision.
Last edited by retiredjg on Sun Dec 10, 2017 2:17 pm, edited 1 time in total.

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triceratop
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Re: Schwab 25% Cheaper than Vanguard?

Post by triceratop » Sun Dec 10, 2017 2:00 pm

retiredjg wrote:
Sun Dec 10, 2017 1:25 pm
Is there a meaningful difference between the funds?
Unlikely, but if held in a taxable account, the Vanguard fund is likely to be more tax efficient because of Vanguard's fund structure.
SCHB is an ETF.
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retiredjg
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Re: Schwab 25% Cheaper than Vanguard?

Post by retiredjg » Sun Dec 10, 2017 2:17 pm

triceratop wrote:
Sun Dec 10, 2017 2:00 pm
retiredjg wrote:
Sun Dec 10, 2017 1:25 pm
Is there a meaningful difference between the funds?
Unlikely, but if held in a taxable account, the Vanguard fund is likely to be more tax efficient because of Vanguard's fund structure.
SCHB is an ETF.
Yes it is. Thanks for catching that. I wonder if Schwab's ETF is more or less tax-efficient than Vanguard's ETF? Don't recall hearing it discussed. Either way, tax-efficiency is likely to be meaningless in this case.

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Doc
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Re: Schwab 25% Cheaper than Vanguard?

Post by Doc » Sun Dec 10, 2017 4:05 pm

retiredjg wrote:
Sun Dec 10, 2017 2:17 pm
I wonder if Schwab's ETF is more or less tax-efficient than Vanguard's ETF?
I think the tax-efficiency comes from the nature of the ETF itself. Vanguard's structure might make it less efficient because it has to share the ETF benefit with its mutual fund brothers and sisters.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.

retiredjg
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Re: Schwab 25% Cheaper than Vanguard?

Post by retiredjg » Sun Dec 10, 2017 5:10 pm

Enough to make a meaningful difference?

Jack FFR1846
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Re: Schwab 25% Cheaper than Vanguard?

Post by Jack FFR1846 » Sun Dec 10, 2017 5:20 pm

SCHB and VTI are interchangable in my humble opinion. I hold both. They do the same thing as far as I'm concerned. I've held SCHB a bit over a year now in taxable and VTI about 6 months in taxable (at TDAmeritrade). Yes, I know TDA took it off the NTF list.
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