Choosing Between 2,400 Stocks and 315 Selective Picks: Which Fund Fits Your Portfolio Strategy?

Understanding the Core Differences

When building a diversified stock market portfolio, two distinct philosophies compete for investor attention. The Schwab U.S. Broad Market ETF (SCHB) represents one approach—capturing the entire U.S. equity landscape across more than 2,400 securities. Meanwhile, the Vanguard Value ETF (VTV) takes a more focused route, curating approximately 315 large-capitalization value stocks. Understanding how these funds operate reveals important implications for your investment approach.

SCHB provides comprehensive exposure to the American stock market by tracking the Dow Jones U.S. Broad Stock Market Index. This encompassing strategy means your portfolio captures everything from established tech leaders to emerging mid-cap players and smaller industrial enterprises. The fund charges just 0.03% annually and holds $38 billion in assets, making it an economical choice for market-wide participation.

VTV operates on different principles. By tracking the CRSP US Large Cap Value Index, it deliberately selects undervalued large-cap securities where financial services companies comprise 25% of holdings, healthcare accounts for 15%, and industrials represent 13%. The fund maintains $215.5 billion in assets and carries a 0.04% expense ratio—barely higher than its broad-market counterpart.

Technology Tilt vs. Value Orientation: Inside the Holdings

The sectoral makeup reveals fundamental strategic differences. SCHB’s technology weighting reaches 34%, reflecting the outsized influence of mega-cap innovators. Nvidia, Apple, and Microsoft rank among its largest positions, driving both growth potential and market-matching volatility. The fund’s financial services allocation sits at 14%, with consumer discretionary adding another 11%.

VTV’s composition tells a different story. Anchored by JPMorgan Chase, Berkshire Hathaway, and Johnson & Johnson, this fund emphasizes established businesses trading at reasonable valuations. The deliberate exclusion of growth-at-any-price securities means you’re missing some of the market’s explosive performers but potentially gaining stability through value-oriented selection.

Income Generation and Risk Profiles

For income-focused investors, the dividend yield differential stands out dramatically. VTV distributes 2.0% annually, nearly double SCHB’s 1.1% payout. This 90-basis-point advantage accumulates meaningfully over decades, particularly for those reinvesting dividends or seeking current income.

Volatility presents another consideration. Over five-year periods, SCHB’s maximum drawdown reached 25.36%, reflecting its technology-heavy composition and market-capturing philosophy. VTV experienced a considerably shallower 17.04% maximum decline, suggesting that value-oriented portfolios navigate market turbulence with less severe losses. The beta comparison reinforces this: SCHB carries a beta of 1.04 (moving in line with the broader market), while VTV’s beta of 0.76 indicates notably lower price sensitivity to market swings.

Returns and Growth Trajectories

Recent performance metrics deserve careful interpretation. Over the trailing 12 months through December 2025, SCHB returned 11.9% while VTV delivered 10.2%—a modest advantage favoring broad market exposure. Extended over five years, a $1,000 investment in SCHB grew to $1,779, compared to $1,646 for VTV. This demonstrates the growth advantage of comprehensive market participation, particularly during technology-driven bull markets.

Making the Right Selection for Your Needs

The decision between these funds hinges on your investment objectives and risk tolerance. SCHB serves investors seeking maximum market representation—essentially owning America’s entire stock market through a single, ultra-low-cost instrument. This approach captures secular growth trends across all sectors and capitalizations while maintaining exceptional cost efficiency.

VTV appeals to investors prioritizing income generation and downside protection. By focusing on established companies trading below their intrinsic value, this fund delivers higher dividend income, lower volatility, and potentially better downside resilience during market corrections. The 22-year track record provides confidence in the value-investment strategy’s consistency.

For growth-oriented investors with long time horizons and comfort with volatility, SCHB’s broader exposure captures the stock market’s full return potential. Those nearing retirement or preferring stable income coupled with lower risk should consider VTV’s value-focused approach. Ultimately, your portfolio construction depends on whether you prioritize comprehensive stock market participation or targeted exposure to undervalued securities within an established universe.