Two Paths to Market Exposure: Why SCHB's 2,400-Stock Universe Differs from VTV's 315 Value Picks

The Core Question: Broad Coverage or Income Focus?

When choosing between Schwab U.S. Broad Market ETF (SCHB) and Vanguard Value ETF (VTV), you’re essentially deciding between two investment philosophies. SCHB gives you sweeping access to roughly 2,400 stocks across the entire U.S. market, while VTV narrows the lens to approximately 315 large-cap value stocks. Both are ultra-low-cost funds, but they target different investor profiles.

The numbers tell part of the story: SCHB charges just 0.03% in annual fees versus VTV’s 0.04%, making them nearly identical on cost. But when it comes to payouts, VTV pulls ahead significantly. The dividend yield sits at 2.0% for VTV compared to SCHB’s 1.1%—a nearly one-percentage-point gap that compounds over time for income-focused investors.

Where the Divergence Becomes Clear

SCHB’s strength lies in comprehensiveness. Tracking the Dow Jones U.S. Broad Stock Market Index, this fund captures small-cap, mid-cap, and large-cap companies with a pronounced tech tilt—technology represents 34% of holdings, with Nvidia, Apple, and Microsoft anchoring the portfolio. Financial services make up 14% and consumer cyclicals another 11%, creating a portfolio that genuinely mirrors the overall U.S. equity market. With $38 billion in assets under management, SCHB delivers market-wide exposure in a single ticker.

VTV takes the selective approach. By tracking the CRSP US Large Cap Value Index, it zeros in on established companies trading at attractive valuations. The top three sectors—financial services (25%), healthcare (15%), and industrials (13%)—reflect its conservative bent. JPMorgan Chase, Berkshire Hathaway, and Johnson & Johnson dominate the holdings. This 22-year-old fund manages $215.5 billion, making it substantially larger than SCHB.

Performance and Volatility: Which Handles Downturns Better?

Over the past year through December 2025, SCHB edged VTV with 11.9% returns versus 10.2%. But here’s where portfolio construction matters: volatility tells a different story. SCHB’s beta of 1.04 means it swings more violently than the S&P 500, while VTV’s 0.76 beta indicates smoother, less dramatic price movements.

This difference crystallizes when markets turn ugly. Over the trailing five years, SCHB experienced a maximum drawdown of 25.36%—meaning it fell nearly a quarter of its peak value. VTV’s worst drop was only 17.04%, roughly 8 percentage points shallower. For investors who lose sleep during corrections, that’s meaningful.

If you’d invested $1,000 five years ago, SCHB would have grown to $1,779 while VTV reached $1,646. The higher volatility of SCHB’s broader market exposure produced bigger gains, but also bigger losses along the way.

The Real Choice: Growth Gambit vs. Income Stability

SCHB makes sense if:

• You want complete market representation without sector bets
• You can tolerate higher volatility for broader diversification
• You’re building wealth over decades and aren’t timing the market
• Your primary goal is long-term capital appreciation

VTV suits your portfolio if:

• Income matters more than growth—that 2.0% yield provides meaningful cash flow
• You prefer established companies with lower price-to-earnings multiples
• You want downside protection during bear markets
• You’re closer to retirement or already drawing from investments

The expense ratio difference (0.03% vs. 0.04%) is negligible—we’re talking about $3 versus $4 annually per $10,000 invested. The 0.9 percentage-point yield gap is where the real economics materialize. Over 20 years, that dividend difference compounds into tangible wealth.

The Verdict

There’s no universal winner here—it depends on where you stand in your investment journey. SCHB captures the market’s full growth potential with its 2,400-stock basket and near-zero fees, while VTV’s more focused 315-stock collection emphasizes stability and income. Both are institutional-grade funds with minimal costs, but they serve fundamentally different purposes. Choose SCHB for total market exposure or VTV for value-oriented income—but honestly, many investors own both.