VTI vs. SCHB

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nrkv
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VTI vs. SCHB

Post by nrkv »

Hello,
Question for people that carry both VTI( Vanguard total stock market) and SCHB (Schwab broad market). Some of you say that you use it for TLH. Granted I only had these funds for about 6 months, but I notice that VTI is relatively more volatile compared to SCHB. For this reason, I keep investing in SCHB (not net new money, just from consolidation).

From back test portfolio, they both are close to each other and I’m not necessarily worried about returns. As I’m in learning phase, I just want to know if I’m reading something wrong. Thank you.
dbr
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Re: VTI vs. SCHB

Post by dbr »

Based on what are you saying VTI is more volatile. In Portfolio Visualizer from 2010 to 2021 those two funds are identical.
David Althaus
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Re: VTI vs. SCHB

Post by David Althaus »

Since 2010 VTI, SCHB, and ITOT track each other almost exactly. Since they are based on different indexes they make ideal tax loss partners. All three have expense ratios of 3 basis points. I default to VTI as it's the largest. Any of the three will serve you well.

All the best
Triple digit golfer
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Re: VTI vs. SCHB

Post by Triple digit golfer »

Here's the last six months. You have to look closely to see two lines.

https://www.portfoliovisualizer.com/bac ... ion2_2=100
donaldfair71
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Re: VTI vs. SCHB

Post by donaldfair71 »

David Althaus wrote: Mon May 10, 2021 8:11 am Since 2010 VTI, SCHB, and ITOT track each other almost exactly. Since they are based on different indexes they make ideal tax loss partners. All three have expense ratios of 3 basis points. I default to VTI as it's the largest. Any of the three will serve you well.

All the best
This is it.

Throw in SPTM, and you have 4 really close TLH partners exposed to the US Stock Market.
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ruralavalon
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Re: VTI vs. SCHB

Post by ruralavalon »

nrkv wrote: Sun May 09, 2021 4:43 pm Hello,
Question for people that carry both VTI( Vanguard total stock market) and SCHB (Schwab broad market). Some of you say that you use it for TLH. Granted I only had these funds for about 6 months, but I notice that VTI is relatively more volatile compared to SCHB. For this reason, I keep investing in SCHB (not net new money, just from consolidation).

From back test portfolio, they both are close to each other and I’m not necessarily worried about returns. As I’m in learning phase, I just want to know if I’m reading something wrong. Thank you.
Triple digit golfer wrote: Mon May 10, 2021 8:39 am Here's the last six months. You have to look closely to see two lines.

https://www.portfoliovisualizer.com/bac ... ion2_2=100
In the last 6 months Vanguard Total Stock Market ETF (VTI) has been less volatile, specifically a lower standard dev and a higher Sharpe ratio and Sortino ratio.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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abuss368
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Re: VTI vs. SCHB

Post by abuss368 »

nrkv wrote: Sun May 09, 2021 4:43 pm Hello,
Question for people that carry both VTI( Vanguard total stock market) and SCHB (Schwab broad market). Some of you say that you use it for TLH. Granted I only had these funds for about 6 months, but I notice that VTI is relatively more volatile compared to SCHB. For this reason, I keep investing in SCHB (not net new money, just from consolidation).

From back test portfolio, they both are close to each other and I’m not necessarily worried about returns. As I’m in learning phase, I just want to know if I’m reading something wrong. Thank you.
The different between an S&P 500 and a total stock market is noise. Rounding error over time. Either works great.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
banook
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Re: VTI vs. SCHB

Post by banook »

nrkv wrote: Sun May 09, 2021 4:43 pm Hello,
Question for people that carry both VTI( Vanguard total stock market) and SCHB (Schwab broad market). Some of you say that you use it for TLH. Granted I only had these funds for about 6 months, but I notice that VTI is relatively more volatile compared to SCHB. For this reason, I keep investing in SCHB (not net new money, just from consolidation).

From back test portfolio, they both are close to each other and I’m not necessarily worried about returns. As I’m in learning phase, I just want to know if I’m reading something wrong. Thank you.
You are not reading anything wrong, and we formally TLH'ed one to the other this past year (2020) in taxable account during the 2020 dip. VTI --> SCHB in our case.
SnowBog
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Re: VTI vs. SCHB

Post by SnowBog »

As a reminder - funds have their own "price". So if you are comparing the $ change - a fund that has a higher "price" is going to look more volatile (when looking at the $). But if you compare in % - they should be nearly identical.

As an example, as of the time of this post:
  • VTI closed at $214.44, down $1.74, or roughly 0.8%
  • SCHB closed at $100.39, down $0.75, or roughly 0.8% (rounded)
So the [roughly] same percentage difference is going to have a larger dollar impact on a fund with a higher "price." In the case of VTI - its roughly 2x more expensive per share than SCHB - so the $ change per day will be roughly 2x as big... That doesn't mean its 2x as volatile - just that the same % move on a bigger "price" per share will be bigger...

The only thing that really matters is the % change... And while they aren't exactly the same - they are pretty dang close - close enough that many people feel comfortable using either one (maybe both) as TLH partners.
stan1
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Re: VTI vs. SCHB

Post by stan1 »

The differences between VTI, SCHB, SPTM, and ITOT are very small and minute details like variance in yield or tax efficiency will vary with time. Also, index construction could vary with time, too. Tax benefits like qualified dividends and qualified business income have changed over time and will continue to change over time.

If one is more convenient to buy at your brokerage for some reason use that one, otherwise they are tax loss harvest partners (at least until tax law changes or is clarified on that one).
Robert20
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Re: VTI vs. SCHB

Post by Robert20 »

stan1 wrote: Tue May 11, 2021 6:52 pm The differences between VTI, SCHB, SPTM, and ITOT are very small and minute details like variance in yield or tax efficiency will vary with time. Also, index construction could vary with time, too. Tax benefits like qualified dividends and qualified business income have changed over time and will continue to change over time.

If one is more convenient to buy at your brokerage for some reason use that one, otherwise they are tax loss harvest partners (at least until tax law changes or is clarified on that one).
One more SFY to the list.

VTI, SCHB, SPTM, SFY and ITOT
donaldfair71
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Re: VTI vs. SCHB

Post by donaldfair71 »

Robert20 wrote: Tue May 11, 2021 8:56 pm
stan1 wrote: Tue May 11, 2021 6:52 pm The differences between VTI, SCHB, SPTM, and ITOT are very small and minute details like variance in yield or tax efficiency will vary with time. Also, index construction could vary with time, too. Tax benefits like qualified dividends and qualified business income have changed over time and will continue to change over time.

If one is more convenient to buy at your brokerage for some reason use that one, otherwise they are tax loss harvest partners (at least until tax law changes or is clarified on that one).
One more SFY to the list.

VTI, SCHB, SPTM, SFY and ITOT
I qualify SFY in my separate layer of partners: VOO/VV. Why? Tracks an index hugging the SP500 with no small cap exposure.

I’d be weary of it personally, they could end the waiver and charge 19 basis points for SP500 beta at any time.
stan1
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Re: VTI vs. SCHB

Post by stan1 »

Robert20 wrote: Tue May 11, 2021 8:56 pm One more SFY to the list.

VTI, SCHB, SPTM, SFY and ITOT
Not the same as VTI, SCHB, SPTM and ITOT by any means.

SFY is not a total US market, market cap weighted ETF like the other four. Expense ratio for SFY is 0.19% vs around 0.03-04% for the others. You may have reasons for buying it, but it's not on the same list as the other 4.
Topic Author
nrkv
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Re: VTI vs. SCHB

Post by nrkv »

Thank you all for the comments. Very useful insights!
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