ETFs for Bogleheads

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Flag of the United States.svg.png This article contains details specific to United States (US) investors. Acting on fund or ETF suggestions in it may have harmful US tax consequences for non-US investors.

Exchange-traded funds (ETFs) have become increasingly popular due to their low barrier to entry.[1] Major brokerages such as Fidelity, Schwab and Vanguard offer access to all ETFs without fees or investment minimums, resulting in a wide variety of choices for investors.[2] This article provides a comparison of core index ETFs for use in Boglehead-style investing.

When choosing between ETFs, the expense ratio (ER) is an important consideration. This page offers a condensed menu of low-expense-ratio ETFs that are commonly used as core holdings in the construction of passive — or "lazy" — portfolios. In each category, up to 3 low-cost, liquid ETFs have been selected for comparison from several fund companies.[note 1]

Stock ETFs

US stock

Category Ticker ETF name ER Index tracked No. of holdings
[note 2]
Total US Stock VTI Vanguard Total Stock Market ETF 0.03% CRSP U.S. Total Market ~ 3800
ITOT iShares Core S&P Total Market ETF 0.03% S&P Total Market ~ 3600
SCHB Schwab U.S. Broad Market ETF 0.03% Dow Jones U.S. Total Market ~ 2600

By size

Category Ticker ETF name ER Index tracked No. of holdings
[note 2]
Large-Cap
[note 3]
VOO Vanguard S&P 500 ETF 0.03% S&P 500 ~ 500
SCHX Schwab U.S. Large-Cap ETF 0.03% Dow Jones US Large-Cap ~ 800
ILCB iShares Morningstar U.S. Equity ETF 0.03% Morningstar US Large-Mid Cap ~ 800
Extended Market VXF Vanguard Extended Market ETF 0.06% S&P Completion ~ 3500
Mid-Cap
[note 3]
VO Vanguard Mid-Cap ETF 0.04% CRSP US Mid Cap ~ 400
SCHM Schwab U.S. Mid-Cap ETF 0.04% Dow Jones US Mid-Cap ~ 500
IMCB iShares Morningstar Mid-Cap ETF 0.04% Morningstar US Mid Cap ~ 600
Small-Cap
[note 3]
SCHA Schwab U.S. Small-Cap ETF 0.04% Dow Jones US Small-Cap ~ 1900
ISCB iShares Morningstar Small-Cap ETF 0.04% Morningstar US Small Cap ~ 2000
VB Vanguard Small-Cap ETF 0.05% CRSP US Small Cap ~ 1500

By style

Category Ticker ETF name ER Index tracked No. of holdings
[note 2]
Large-Cap Growth VUG Vanguard Growth ETF 0.04% CRSP US Large Cap Growth ~ 300
IUSG iShares Core S&P U.S. Growth ETF 0.04% S&P 900 Growth ~ 500
SCHG Schwab U.S. Large-Cap Growth ETF 0.04% Dow Jones US Large-Cap Growth ~ 200
Large-Cap Value VTV Vanguard Value ETF 0.04% CRSP US Large Cap Value ~ 300
IUSV iShares Core S&P U.S. Value ETF 0.04% S&P 900 Value ~ 700
SCHV Schwab U.S. Large-Cap Value ETF 0.04% Dow Jones US Large-Cap Value ~ 500
Small-Cap Growth
[note 4]
ISCG iShares Morningstar Small-Cap Growth ETF 0.06% Morningstar US Small Cap Broad Growth ~ 1300
VBK Vanguard Small-Cap Growth ETF 0.07% CRSP US Small Cap Growth ~ 700
SLYG SPDR S&P 600 Small Cap Growth ETF 0.15% S&P Small Cap 600 Growth ~ 300
Small-Cap Value
[note 4]
ISCV iShares Morningstar Small-Cap Value ETF 0.06% Morningstar US Small Cap Broad Value ~ 1300
VBR Vanguard Small-Cap Value ETF 0.07% CRSP US Small Cap Value ~ 900
SLYV SPDR S&P 600 Small Cap Value ETF 0.15% S&P Small Cap 600 Value ~ 500

International stock

Category Ticker ETF name ER Index tracked No. of holdings
[note 2]
Total International Stock VXUS Vanguard Total International Stock ETF 0.08% FTSE Global All Cap ex US ~ 7600
IXUS iShares Core MSCI Total International Stock ETF 0.09% MSCI ACWI ex-USA IMI ~ 4300

By size

Category Ticker ETF name ER Index tracked No. of holdings
[note 2]
International Large-Cap VEU Vanguard FTSE All-World ex-US ETF 0.08% FTSE All-World ex-US ~ 3500
International Small-Cap VSS Vanguard FTSE All-World ex-US Small-Cap ETF 0.11% FTSE All-World ex-US Small Cap ~ 4100

By style

Category Ticker ETF name ER Index tracked No. of holdings
[note 2]
Developed Markets
[note 5]
SPDW SPDR Portfolio Developed World ex-US ETF 0.04% S&P Developed Ex-U.S. BMI ~ 2300
VEA Vanguard FTSE Developed Markets ETF 0.05% FTSE Developed All Cap ex US ~ 4000
IDEV iShares Core MSCI International Developed Markets ETF 0.05% MSCI World ex USA IMI ~ 2200
Emerging Markets
[note 5]
VWO Vanguard FTSE Emerging Markets ETF 0.10% FTSE Emerging Markets All Cap China A Inclusion ~ 5200
SPEM SPDR Portfolio Emerging Markets ETF 0.11% S&P Emerging Markets BMI ~ 2600
IEMG iShares Core MSCI Emerging Markets ETF 0.11% MSCI Emerging Markets IMI ~ 2600
Developed Large-Cap SCHF Schwab International Equity ETF[note 6] 0.06% FTSE Developed ex US ~ 1500
Developed Small-Cap SCHC Schwab International Small-Cap Equity ETF[note 6] 0.11% FTSE Developed Small Cap ex U.S. Liquid ~ 2300
Emerging Large-Cap SCHE Schwab Emerging Markets Equity ETF[note 6] 0.11% FTSE Emerging ~ 1600
Emerging Small-Cap [note 7]

Global stock

Category Ticker ETF name ER Index tracked No. of holdings
[note 2]
Total World Stock VT Vanguard Total World Stock ETF 0.08% FTSE Global All Cap ~ 9100
SPGM SPDR Portfolio MSCI Global Stock Market ETF[note 4] 0.09% MSCI ACWI IMI ~ 1700

Bond ETFs

US bond

Category Ticker ETF name ER Index tracked Duration
Total US Bond SPAB SPDR Portfolio Aggregate Bond ETF 0.03% Bloomberg Barclays U.S. Aggregate 7 yr
BND Vanguard Total Bond Market ETF 0.035% Bloomberg Barclays U.S. Aggregate Float Adjusted
AGG iShares Core U.S. Aggregate Bond ETF 0.04% Bloomberg Barclays U.S. Aggregate

Government

Category Ticker ETF name ER Index tracked Duration
Short-Term
Treasury
VGSH Vanguard Short-Term Treasury ETF 0.05% Bloomberg Barclays U.S. Treasury 1-3 Year Bond 2 yr
SCHO Schwab Short-Term U.S. Treasury ETF 0.05%
SPTS SPDR Portfolio Short Term Treasury ETF 0.06%
Intermediate
Treasury
VGIT Vanguard Intermediate-Term Treasury ETF 0.05% Bloomberg Barclays U.S. Treasury 3-10 Year Bond 5 yr
SCHR Schwab Intermediate-Term U.S. Treasury ETF 0.05%
GOVT iShares U.S. Treasury Bond ETF 0.05% ICE U.S. Treasury Core Bond 7 yr
Long-Term
Treasury
VGLT Vanguard Long-Term Treasury ETF 0.05% Bloomberg Barclays U.S. Long Treasury Bond 18 yr
SCHQ Schwab Long-Term U.S. Treasury ETF 0.05%
SPTL SPDR Portfolio Long Term Treasury ETF 0.06% 19 yr
Extended Duration
Treasury
[note 4]
EDV Vanguard Extended Duration Treasury ETF 0.07% Bloomberg Barclays U.S. Treasury STRIPS 20-30 Year 25 yr
GOVZ iShares 25+ Year Treasury STRIPS Bond ETF 0.07% ICE BofA Long US Treasury Principal STRIPS 27 yr
ZROZ PIMCO 25+ Year Zero Coupon U.S.
Treasury Index ETF
0.15%
Short-Term TIPS VTIP Vanguard Short-Term Inflation-Protected
Securities ETF
0.05% Bloomberg Barclays US Treasury TIPS (0-5 Y) 3 yr
STIP iShares 0-5 Year TIPS Bond 0.05%
PBTP Invesco PureBeta 0-5 Yr US TIPS ETF 0.07% ICE BofA ML 0-5 Year US Inflation-Linked Treasury 2 yr
Intermediate TIPS SCHP Schwab U.S. TIPS ETF 0.05% Bloomberg Barclays US Treasury Inflation Protected Notes 7 yr
SPIP SPDR Portfolio TIPS ETF 0.12% Bloomberg Barclays U.S. Government Inflation-Linked Bond 8 yr
TIP iShares TIPS Bond ETF 0.19% Bloomberg Barclays US Treasury Inflation Protected Notes 7 yr
Long-Term TIPS
[note 4]
LTPZ PIMCO 15+ Year U.S. TIPS Index ETF 0.20% ICE BofA ML 15+ Year US Inflation-Linked Treasury 21 yr

Investment-grade

Category Ticker ETF name ER Index tracked Duration
Short-Term
Aggregate
BSV Vanguard Short-Term Bond ETF 0.05% Bloomberg Barclays U.S. 1-5 Year Government/Credit Float Adjusted 3 yr
ISTB iShares Core 1-5 Year USD Bond ETF 0.06% Bloomberg Barclays US Universal 1-5 Year
Intermediate
Aggregate
BIV Vanguard Intermediate-Term Bond ETF 0.05% Bloomberg Barclays U.S. 5-10 Year Government/Credit Float Adjusted 7 yr
IMTB iShares Core 5-10 Year USD Bond ETF 0.06% Bloomberg Barclays U.S. Universal 5-10 Year 6 yr
Long-Term
Aggregate
BLV Vanguard Long-Term Bond ETF 0.05% Bloomberg Barclays U.S. Long Government/Credit Float Adjusted 16 yr
ILTB iShares Core 10+ Year USD Bond ETF 0.06% Bloomberg Barclays US Universal 10+ Year

International bond

Category Ticker ETF name ER Index tracked Duration
Total International Bond BNDX Vanguard Total International Bond ETF 0.08% Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped 8 yr
IAGG iShares Core International Aggregate Bond ETF 0.08% Bloomberg Barclays Global Aggregate ex USD 10% Issuer Capped (Hedged)

Global bond

Category Ticker ETF name ER Index tracked Duration
Total World Bond BNDW Vanguard Total World Bond ETF 0.06% Bloomberg Barclays Global Aggregate Float Adjusted Composite 8 yr

Notes

  1. The price at which you buy and sell funds on the market is influenced by the liquidity or demand for that fund. This is known as the bid/ask spread. It should not impact your decision to buy and sell ETFs: the spread is usually small (~ 0.01%) for widely-traded ETFs. Notes have been added for certain categories where larger spreads have been observed.
  2. 2.0 2.1 2.2 2.3 2.4 2.5 2.6 The number of holdings of an ETF depends on how it tracks its index. An ETF can mirror the index by holding all its constituents: this is known as index replication. Alternatively, it may use sampling techniques: a smaller number of securities may be used to match the return of the index. This can increase the risk of tracking error. For investors, the number of holdings may be also of use in tax loss harvesting: it can be a significant differentiator if you ever need to make the case that a fund is not substantially identical to another. (See the fund's prospectus for exact numbers and details of holdings.)
  3. 3.0 3.1 3.2 Index providers differ on what constitutes large, mid and small-cap. The oldest large-cap benchmark is the S&P 500, which covers 82% of the US stock market (as of July 2021); in comparison, the CRSP large-cap covers 85%.[3] A different definition, the top 70%, is used in Morningstar's style box; this is also known as "mega-cap" (per CRSP).[4] Morningstar also has a "large-mid" cap index that covers the top 90%.[4] For mid-cap stocks, providers usually carve out a distinct space in between large and small-caps. CRSP instead prefers an overlap: CRSP large-cap = CRSP mid-cap + CRSP mega-cap.[5] For small-caps, some common notions are the bottom 15% of the market (used by CRSP), the bottom 10% (used by Morningstar) and the bottom 5% (per the S&P 600 small-cap index, as of July 2021).[4][5]
  4. 4.0 4.1 4.2 4.3 4.4 This category of ETFs has been observed to be less liquid than others, and investors may see a large bid/ask spread. As an illustration of what the spread might look like, the following tables show the 60-day average spreads reported on Etf.com on July 1, 2021. Experienced investors are cautioned against trading these ETFs near market open/close, and to utilize limit orders. (New investors can safely ignore this information. This is a minor concern and should not influence your decision to trade.)
    Category Ticker Bid/ask spread
    Small-Cap Growth ISCG 0.24%
    SLYG 0.10%
    Small-Cap Value ISCV 0.18%
    Total World Stock SPGM 0.19%
    Extended Duration Treasury GOVZ 0.15%
    ZROZ 0.25%
    Long-Term TIPS LTPZ 0.11%
  5. 5.0 5.1 Index providers differ on which countries are considered developed and emerging. FTSE and S&P classify South Korea as a developed market, while MSCI considers it an emerging market.[6] South Korea makes up about 5% of international market cap (as of July 2021).[3]
  6. 6.0 6.1 6.2 International large-cap can be obtained by combining developed large-cap (SCHF) and emerging markets large-cap (SCHE). A 75:25 ratio of SCHF and SCHE is equivalent to VEU, with a slightly lower ER (0.0725% vs 0.08%).[3] But consider that it may be simpler to use a single fund. Developed markets can be obtained by combining developed large-cap (SCHF) and small-cap (SCHC), but this has a higher ER than the single fund options.
  7. There is currently no low-cost emerging small-cap ETF. The cheapest index fund is EWX (SPDR S&P Emerging Markets Small Cap ETF) with an ER of 0.65%.

See also

References

  1. "Why are some mutual funds changing into ETFs?". The New York Times. January 15, 2021.
  2. "Battle for client assets heats up as brokers cut fees to zero". CNBC. October 13, 2019.
  3. 3.0 3.1 3.2 Morningstar X-Ray, (free) subscription required to access.
  4. 4.0 4.1 4.2 "Morningstar Broad Style Indexes" (PDF). Morningstar. Retrieved September 1, 2021.
  5. 5.0 5.1 "Key concept 4: The CRSP approach to combining size benchmarks". CRSP. Retrieved July 3, 2021.
  6. "Is South Korea crowding your emerging markets allocation?". S&P Global. November 24, 2020.

External links