Does it make sense to have VTI+VOO+SCHD+VGT?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
zirkel
Posts: 2
Joined: Thu Jan 13, 2022 8:54 pm

Does it make sense to have VTI+VOO+SCHD+VGT?

Post by zirkel »

Hi! I'm very new to investing in ETFs as I've had my money on individual stocks for a few years now. I am a non-US investor so Interactive Brokers is how I intend to buy these ETFs. I'm planning to invest $2,000 every month. Would it make sense for me to allocate $500 each for the following stocks:

VTI Vanguard Total Stock Market Index Fund ETF
VOO Vanguard 500 Index Fund ETF
VGT Vanguard Information Technology Index Fund ETF
SCHD Schwab US Dividend Equity ETF

Or would it be better for me to invest $2,000 every month on only VTI?

Thank you!
User avatar
Wiggums
Posts: 4679
Joined: Thu Jan 31, 2019 8:02 am

Re: Does it make sense to have VTI+VOO+SCHD+VGT?

Post by Wiggums »

I would just buy VTI
Investors need to be better informed about the costs they pay. “High fund fees can be hazardous to your wealth in the same way that high calories can be hazardous for your health.”
3funder
Posts: 1639
Joined: Sun Oct 15, 2017 9:35 pm

Re: Does it make sense to have VTI+VOO+SCHD+VGT?

Post by 3funder »

VTI is all you need.
Global stocks, US bonds, and time.
Affable at 50
Posts: 157
Joined: Fri Dec 27, 2019 2:34 am

Re: Does it make sense to have VTI+VOO+SCHD+VGT?

Post by Affable at 50 »

zirkel wrote: Fri Jan 14, 2022 6:10 am Hi! I'm very new to investing in ETFs as I've had my money on individual stocks for a few years now. I am a non-US investor so Interactive Brokers is how I intend to buy these ETFs. I'm planning to invest $2,000 every month. Would it make sense for me to allocate $500 each for the following stocks:

VTI Vanguard Total Stock Market Index Fund ETF
VOO Vanguard 500 Index Fund ETF
VGT Vanguard Information Technology Index Fund ETF
SCHD Schwab US Dividend Equity ETF

Or would it be better for me to invest $2,000 every month on only VTI?

Thank you!
Just buy VTI. The other ETFs add unnecessary concentration in segments that could hurt you. VOO is already 85% of VTI so you have it covered. VGT is a bet on a single sector, which is unnecessary because technology is already a large component of VTI. SCHD will increase your taxable income each year, which is contrary to the goal of keeping more of what you earn.
exodusNH
Posts: 1926
Joined: Wed Jan 06, 2021 8:21 pm

Re: Does it make sense to have VTI+VOO+SCHD+VGT?

Post by exodusNH »

zirkel wrote: Fri Jan 14, 2022 6:10 am Hi! I'm very new to investing in ETFs as I've had my money on individual stocks for a few years now. I am a non-US investor so Interactive Brokers is how I intend to buy these ETFs. I'm planning to invest $2,000 every month. Would it make sense for me to allocate $500 each for the following stocks:

VTI Vanguard Total Stock Market Index Fund ETF
VOO Vanguard 500 Index Fund ETF
VGT Vanguard Information Technology Index Fund ETF
SCHD Schwab US Dividend Equity ETF

Or would it be better for me to invest $2,000 every month on only VTI?

Thank you!
VTI only. The rest just concentrate risk.

Watch Ben Felix's YouTube video "the irrelevance of dividends" to learn why they shouldn't matter that much for US companies. (The story might be different for ex-US where share buybacks aren't as common.)
sycamore
Posts: 3582
Joined: Tue May 08, 2018 12:06 pm

Re: Does it make sense to have VTI+VOO+SCHD+VGT?

Post by sycamore »

zirkel wrote: Fri Jan 14, 2022 6:10 am Would it make sense for me to...
Or would it be better for me to...
Welcome to the forum zirkel.

I'll suggest a better way to frame your question is "What are the advantages and disadvantages of the two options? On balance, is one option more advantageous than another?"

The 1 fund TSM option is the ultimate in simplicity, has low expense ratio, and broad market coverage. No need for rebalancing.

The 4 funds option:
- it is also low expense but not quite as low as the 1 fund.
- 3 of the 4 funds are predominantly large cap, so the option is tilted even more to large caps than TSM is. If you wanted small-cap exposure you're missing out.
- VGT is a growth fund focused on one sector of the economy. SCHD is more of a value fund. On net, they add some concentration to a couple parts of the market. Advantage or disadvantage? Some people say yes, some people say no - depends on their outlook on the market and whether they think certain types of stocks will perform. Bogleheads philosophy says no.
- it has greater price volatility
- suffers tracking from tracking error - when it underperforms TSM, you may feel regret. And you may feel good when it outperforms.
- will you rebalance? how/when? So there's some cost to rebalancing, or at least thinking about it.

One disadvantage of both options: there's no international stocks so the portfolio is missing some diversification. There's lots of arguments about whether US+international or US-only is better. You have to decide.

All in all, the reason the 4 fund option doesn't make sense is that its benefits are uncertain and of little benefit, and are outweighed by clear and certain costs.
dbr
Posts: 38867
Joined: Sun Mar 04, 2007 9:50 am

Re: Does it make sense to have VTI+VOO+SCHD+VGT?

Post by dbr »

The question might be what would suggest those four funds have a purpose compared to the total market?

(They don't.)

An exception is that VTI and VOO could be tax loss harvesting partners.
Post Reply