Schwab Target Index 2060 (SWYNX) vs Vanguard Target Retirement 2060 (VTTSX)

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yql
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Schwab Target Index 2060 (SWYNX) vs Vanguard Target Retirement 2060 (VTTSX)

Post by yql » Mon Feb 11, 2019 11:05 am

I'm trying to decide which target date fund I want to use, and I'm picking between Schwab Target Index 2060 (SWYNX) and Vanguard Target Retirement Fund 2060 (VTTSX).

I already have a Schwab account, so it would be a bit easier to get the Schwab fund. I also like that the Schwab fund has a 95/5 stock/bond split while the Vanguard has a 90/10 split. That said, the Schwab fund is made up of 7 underlying ETFs and the Vanguard fund is only 4 underlying funds. I prefer the simplicity of the Vanguard fund, especially if I want to replicate it later down the road. Schwab's net expense ratio is .08% and Vanguard is .15% although I understand that to be an almost negligible difference. The last advantage I see to Vanguard is that they're the biggest name in this business, and I think that'd make me feel a bit more secure having my retirement accounts with them.

I think I'm leaning toward Vanguard, but I'm also curious to see what all of you think. Which would you choose and why?

mhalley
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Re: Schwab Target Index 2060 (SWYNX) vs Vanguard Target Retirement 2060 (VTTSX)

Post by mhalley » Mon Feb 11, 2019 12:34 pm

If you don’t like the aa of the schwab tr fund, pick a year that has the aa you want. I think the biggest question to ask is what percent do you want in international as vanguard has more. Either is perfectly fine imho. Not much in the way of history, but so far performance is close.

MotoTrojan
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Re: Schwab Target Index 2060 (SWYNX) vs Vanguard Target Retirement 2060 (VTTSX)

Post by MotoTrojan » Mon Feb 11, 2019 12:38 pm

Schwab’s 7 funds wouldn’t worry me if you are comfortable with the allocation. Major differences would be inclusion of REITs and the international allocation as noted above.

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David Jay
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Re: Schwab Target Index 2060 (SWYNX) vs Vanguard Target Retirement 2060 (VTTSX)

Post by David Jay » Mon Feb 11, 2019 12:41 pm

Welcome to the forum!
mhalley wrote:
Mon Feb 11, 2019 12:34 pm
If you don’t like the aa of the schwab tr fund, pick a year that has the aa you want.
This! We used to say it more often here on BH, but one should select their Target Date fund by AA, not by “year”. Use the 2050 fund (Or 2040, etc.) to get the AA you want.

There is no “wrong answer”, both fund families are fine.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

MnD
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Re: Schwab Target Index 2060 (SWYNX) vs Vanguard Target Retirement 2060 (VTTSX)

Post by MnD » Mon Feb 11, 2019 12:47 pm

If I had a Schwab account already as you stated you do, I'd invest in the Schwab fund and vice-versa for Vanguard.
In my opinion financial simplicity in accounts management and avoiding any unnecessary transaction fees overrides any fund performance difference which will be negligible.

Do you see a big performance difference here?
Image

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yql
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Re: Schwab Target Index 2060 (SWYNX) vs Vanguard Target Retirement 2060 (VTTSX)

Post by yql » Mon Feb 11, 2019 1:21 pm

mhalley wrote:
Mon Feb 11, 2019 12:34 pm
If you don’t like the aa of the schwab tr fund, pick a year that has the aa you want. I think the biggest question to ask is what percent do you want in international as vanguard has more. Either is perfectly fine imho. Not much in the way of history, but so far performance is close.
I like the allocation of Schwab because it's a bit more aggressive. I was hoping for a more aggressive allocation from Vanguard, which they don't have. Schwab has a slightly lower international allocation, which I suppose is something to consider. Thanks!

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yql
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Re: Schwab Target Index 2060 (SWYNX) vs Vanguard Target Retirement 2060 (VTTSX)

Post by yql » Mon Feb 11, 2019 1:23 pm

David Jay wrote:
Mon Feb 11, 2019 12:41 pm
Welcome to the forum!
mhalley wrote:
Mon Feb 11, 2019 12:34 pm
If you don’t like the aa of the schwab tr fund, pick a year that has the aa you want.
This! We used to say it more often here on BH, but one should select their Target Date fund by AA, not by “year”. Use the 2050 fund (Or 2040, etc.) to get the AA you want.

There is no “wrong answer”, both fund families are fine.
Thank you!

I actually was hoping for a more aggressive allocation than the 90/10 Vanguard offers for the 2060, but they don't have it. Perhaps the difference between 95/5 and 90/10 is very small, though, so I suppose it may not matter as much as I am thinking.

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yql
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Re: Schwab Target Index 2060 (SWYNX) vs Vanguard Target Retirement 2060 (VTTSX)

Post by yql » Mon Feb 11, 2019 1:27 pm

MnD wrote:
Mon Feb 11, 2019 12:47 pm
If I had a Schwab account already as you stated you do, I'd invest in the Schwab fund and vice-versa for Vanguard.
In my opinion financial simplicity in accounts management and avoiding any unnecessary transaction fees overrides any fund performance difference which will be negligible.

Do you see a big performance difference here?
Image
That's a really good point. I can see how it'd be frustrating for me to have to cycle through all of my accounts to manage my money. Thanks for posting the performance difference! They're obviously almost identical, so I suppose it doesn't matter what I choose.

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David Jay
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Re: Schwab Target Index 2060 (SWYNX) vs Vanguard Target Retirement 2060 (VTTSX)

Post by David Jay » Mon Feb 11, 2019 1:31 pm

yql wrote:
Mon Feb 11, 2019 1:23 pm
David Jay wrote:
Mon Feb 11, 2019 12:41 pm
Welcome to the forum!
mhalley wrote:
Mon Feb 11, 2019 12:34 pm
If you don’t like the aa of the schwab tr fund, pick a year that has the aa you want.
This! We used to say it more often here on BH, but one should select their Target Date fund by AA, not by “year”. Use the 2050 fund (Or 2040, etc.) to get the AA you want.

There is no “wrong answer”, both fund families are fine.
Thank you!

I actually was hoping for a more aggressive allocation than the 90/10 Vanguard offers for the 2060, but they don't have it. Perhaps the difference between 95/5 and 90/10 is very small, though, so I suppose it may not matter as much as I am thinking.
I do not know of any TargetDate fund that does not include some bond element.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

Topic Author
yql
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Joined: Sun Feb 10, 2019 11:17 am

Re: Schwab Target Index 2060 (SWYNX) vs Vanguard Target Retirement 2060 (VTTSX)

Post by yql » Mon Feb 11, 2019 1:40 pm

David Jay wrote:
Mon Feb 11, 2019 1:31 pm
yql wrote:
Mon Feb 11, 2019 1:23 pm
David Jay wrote:
Mon Feb 11, 2019 12:41 pm
Welcome to the forum!
mhalley wrote:
Mon Feb 11, 2019 12:34 pm
If you don’t like the aa of the schwab tr fund, pick a year that has the aa you want.
This! We used to say it more often here on BH, but one should select their Target Date fund by AA, not by “year”. Use the 2050 fund (Or 2040, etc.) to get the AA you want.

There is no “wrong answer”, both fund families are fine.
Thank you!

I actually was hoping for a more aggressive allocation than the 90/10 Vanguard offers for the 2060, but they don't have it. Perhaps the difference between 95/5 and 90/10 is very small, though, so I suppose it may not matter as much as I am thinking.
I do not know of any TargetDate fund that does not include some bond element.
Absolutely! I wasn't hoping for 100% equities, just suggesting that I liked Schwab's 95/5, which probably means I should just go with them!

NoHeat
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Re: Schwab Target Index 2060 (SWYNX) vs Vanguard Target Retirement 2060 (VTTSX)

Post by NoHeat » Mon Feb 11, 2019 1:56 pm

yql wrote:
Mon Feb 11, 2019 1:40 pm
I liked Schwab's 95/5, which probably means I should just go with them!
The Schwab fund also has a lower expense ratio, 0.08% vs 0.15%. Over 30 years, that could make a 2% difference in your final balance, if all other things were equal. Since you're splitting hairs to choose, that's another hair to split.

rkhusky
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Re: Schwab Target Index 2060 (SWYNX) vs Vanguard Target Retirement 2060 (VTTSX)

Post by rkhusky » Mon Feb 11, 2019 5:58 pm

I wouldn't worry about the 4 underlying funds versus 7. I've seen some TD funds with 15 or 20 underlying holdings. Schwab separates Large and Small US and also Developed and Emerging Int'l, along with a small tilt towards REITs'. And the allocation to Short Treasuries is only 0.15%. It looks pretty standard.

Another difference is that the Vanguard fund has $3.3B in assets versus $49M for the Schwab fund, probably partly due to the former starting 4 years earlier.

Topic Author
yql
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Re: Schwab Target Index 2060 (SWYNX) vs Vanguard Target Retirement 2060 (VTTSX)

Post by yql » Mon Feb 11, 2019 6:13 pm

rkhusky wrote:
Mon Feb 11, 2019 5:58 pm
I wouldn't worry about the 4 underlying funds versus 7. I've seen some TD funds with 15 or 20 underlying holdings. Schwab separates Large and Small US and also Developed and Emerging Int'l, along with a small tilt towards REITs'. And the allocation to Short Treasuries is only 0.15%. It looks pretty standard.

Another difference is that the Vanguard fund has $3.3B in assets versus $49M for the Schwab fund, probably partly due to the former starting 4 years earlier.
Vanguard's has 67 times more assets than the Schwab fund. That feels significant to me, but I don't have enough knowledge to know why that is. Do you have any thoughts?

rkhusky
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Re: Schwab Target Index 2060 (SWYNX) vs Vanguard Target Retirement 2060 (VTTSX)

Post by rkhusky » Tue Feb 12, 2019 6:05 pm

yql wrote:
Mon Feb 11, 2019 6:13 pm
Vanguard's has 67 times more assets than the Schwab fund. That feels significant to me, but I don't have enough knowledge to know why that is. Do you have any thoughts?
As mentioned, the age of the funds could be a factor. And perhaps Schwab attracts more investors that want to slice and dice their portfolios, whereas Vanguard attracts many investors that prefer an all-in-one fund, who don't want to spend significant time managing their portfolio and would rather let the experts at Vanguard handle that.

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