Broad Market vs. Value Play: Why SCHB's 2,400 Holdings and VTV's 315 Picks Deserve Different Strategies

Understanding the Core Distinction

When evaluating Schwab U.S. Broad Market ETF (NYSEMKT:SCHB) and Vanguard Value ETF (NYSEMKT:VTV), investors face a fundamental choice between market comprehensiveness and income focus. The former encompasses approximately 2,400 securities across the entire U.S. equity spectrum, while the latter concentrates on 315 carefully selected large-cap value positions. This structural difference shapes everything from risk exposure to dividend expectations.

Performance and Risk: The Five-Year Track Record

Over the past five years, the funds have diverged significantly in their risk characteristics. SCHB experienced a maximum drawdown of 25.36%, whereas VTV’s steeper decline reached only 17.04%. This disparity reflects VTV’s defensive positioning through value stocks, which tend to exhibit lower volatility during market corrections.

Looking at wealth accumulation, a $1,000 investment in SCHB would have grown to $1,779 over this period, while the same amount in VTV reached $1,646. Despite VTV’s lower drawdown, SCHB’s broader market exposure captured greater upside during recoveries, particularly benefiting from technology sector strength.

Fee Structure and Income Generation

Both funds maintain exceptionally competitive expense ratios—SCHB at 0.03% and VTV at 0.04%—making cost a negligible differentiator. The more substantial gap emerges in dividend yields: VTV distributes 2.0% annually compared to SCHB’s 1.1%, representing approximately 0.9 percentage points of additional income for value-focused investors.

Portfolio Composition and Sector Emphasis

SCHB’s Comprehensive Approach

The Schwab offering maintains a technology-heavy allocation (34%), followed by financial services (14%) and consumer cyclicals (11%). Its holdings span large-cap leaders like Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT), but crucially include mid- and small-cap exposure that SCHB’s broader investment universe naturally captures.

VTV’s Value Concentration

By contrast, Vanguard’s value strategy emphasizes financial services (25%), healthcare (15%), and industrials (13%). The 315-stock portfolio features established names including JPMorgan Chase (NYSE:JPM), Berkshire Hathaway (NYSE:BRK.B), and Johnson & Johnson (NYSE:JNJ)—companies with lengthy operational histories and established market positions.

Tracking Different Market Segments

SCHB follows the Dow Jones U.S. Broad Stock Market Index, delivering exposure to roughly 2,400 companies spanning all capitalization tiers. This exhaustive coverage means investors essentially hold the entire U.S. equity market through a single security.

VTV tracks the CRSP US Large Cap Value Index, limiting exposure to 315 positions meeting value criteria. With $215.53 billion in assets under management versus SCHB’s $38.28 billion, VTV’s substantially larger asset base reflects institutional appetite for value-oriented strategies.

Beta Considerations and Volatility Profiles

SCHB’s beta of 1.04 indicates slight amplification of market movements, consistent with its technology-heavy composition. VTV’s beta of 0.76 demonstrates defensive characteristics, moving less dramatically than broad market indices during both upswings and downturns. This distinction becomes critical during volatile periods when investors prioritize capital preservation.

Making the Selection

The choice hinges on investment objectives. Investors seeking complete market participation with growth potential favor SCHB’s comprehensive 2,400-stock mandate and balanced sector representation. Those prioritizing income streams and downside mitigation gravitate toward VTV’s concentrated 315-position roster of established value companies.

Income-focused portfolios benefit from VTV’s 2.05% yield, while growth-oriented investors appreciate SCHB’s broader market capture and historically stronger absolute returns. Neither fund’s marginally higher expense ratio represents a meaningful cost consideration given their near-identical fee structures.