SWTSX vs VTSAX: Which Has Better Returns?

Vanguard and Charles Schwab are two of the most prominent players for individual investors like you and me. Vanguards mutual funds and ETFs are some of the most popular funds. In fact, Vanguard is the largest asset management company there is. 

Investing with Vanguard isn’t a bad idea, but that doesn’t mean you shouldn’t investigate what other options you might have. Remember, diversification is an essential principle for investing. So having your investments in two different, although very similar, funds isn’t a bad idea.

Here I will compare SWTSX vs VTSAX. These are two similar funds. However, SWTSX is a Schwab created fund, while VTSAX is one of Vanguards’ more popular funds. 


Before we dive into facts about each fund, we should first learn about the issuers behind them, right?

As noted before, Vanguard is the biggest asset management company in terms of assets held. Vanguard is overseeing the investment of over 1.3 trillion dollars worth of assets. Yes, that’s trillion, with a “T.” Pretty impressive if you ask me. As you might have guessed, their funds are typically some of the most popular due to their low cost and high quality. 

Charles Schwab has been helping investors reach their financial goals since 1971. So, they are by no means a new player to the game. They oversee more than 300 billion worth of investor assets regarding investments. Not quite in the same league as Vanguard, but nothing to sneeze at either. Schwab also has a wide range of quality funds and products but is typically geared more toward retirement investing.

SWTSX VS VTSAX: Underlying Index Followed

VTSAX(Vanguard Total Stock Market Index Fund Admiral Shares) is not technically an index fund but, for the most part, acts like one. First issued in 1992, VTSAX includes large-cap, mid-cap, and small-cap companies alike. However, because of the inclusion of all capsizes, and the fund is not actively managed, it behaves more like an index fund tracking the entire stock market as a whole.

SWTSX (Schwab Total Stock Market Index Fund) is an actual index fund that tracks the Dow Jones U.S. Total Stock Market Index. SWTSX also includes stocks ranging from small-cap to large-cap to capture the market as a whole.

As far as the structure and index go for SWTX vs VTSAX, they are essentially the same fund.

SWTSX VS VTSAX: Expense Ratios

If you are unsure what an expense ratio is, allow me to clarify. An expense ratio is the fees you’ll pay when investing in a mutual fund or ETF. These are typically expenses incurring by the fund for being actively managed. Expense fees typically go toward paying salaries, rent, and other business expenses needed to actively manage a fund. 

Both expense ratios are very similar when it comes to SWTSX vs VTSAX. Even though VTSAX is technically a mutual fund, it’s not actively managed, so the fee associated with it reflect that. Coming in at a measly 0.04%, it’s one of the lowest fees out there for a mutual fund, which are typical in the 0.75% range. 

So how does STWSX stack up? Well, seeing that it actually is an index fund, its expense ratio comes in slightly lower at 0.03%. Obviously, a .01% difference might not make a huge difference in your decision in SWTSX vs VTSAX, but it’s still good to know.

SWTSX VS VTSAX: Minimum Initial Investments

Another factor that comes into play when determining the right fund to invest your money in could be the minimum investment. Again, the term is as straightforward as it gets as this is the minimum you can invest into a fund. The one aspect that should be noted is that this is only the initial investment. Once you’ve invested in a fund, you can typically buy more shares with as little or as much as you’d like to invest at that time.

When it comes to SWTSX vs VTSAX, SWTSX has a significant advantage. Since VTSAX is a mutual fund, it will typically have higher costs per investor. These costs are why VTSAX has an initial minimum investment of $3,000. However, suppose you choose to invest with VTSAX after the initial 3k investment. In that case, you’ll be able to invest with as little as $1 for subsequent investments.

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SWTSX is an index fund with a negligible cost per investor. The initial minimum investment is the price of one share at the time. Obviously, depending on when you are reading this, that amount may vary. Still, it will undoubtedly be much lower than the minimum for VTSAX. 

SWTSX VS VTSAX: Net Assets and Holdings

The number of assets in either of these mutual funds won’t make much difference to us individual investors. Both are easily traded on any given day, so you should never have an issue buying or selling shares when you want to. 

As you might expect, due to the size of the issuers, VTSAX holds a significant advantage over SWTSX. VTSAX currently has 321 billion in assets, while STSAX holds about 17.6 billion. But, again, the size of the assets doesn’t change much to individual investors besides showing how much others have been willing to invest in either one.

As for the holdings of SWTSX vs VTSAX, VTSAX holds a slightly more significant advantage. VTSAX holds over 3,600 different individual stocks, while SWTSX holds just over 3,000 stocks. This means VTSAX will follow the overall trends of the total stock market as a whole and could be less volatile than SWTSX. 

Both funds also hold the same top 10 holdings, with only minor variations in how much of their total assets are in each:

SWTSX Top Holdings:

CompanySymbolTotal Net Assests
Apple IncAAPL5.59%
Microsof Corp.MSFT5.10%
Amazon.com IncAMZN2.94%
Alphabet Inc. Cl AGOOGL1.76%
Tesla Inc.TSLA1.74%
Alphabet Inc. Cl CGOOG1.63%
Meta Platforms Inc.FB1.61%
Berkshir Hathaway Inc. Cl BBRK.B1.1%
UnitedHealth Group IncUNH0.96%

VTSAX Top Holdings:

CompanySymbolTotal Net Assests
Apple IncAAPL5.71%
Microsof Corp.MSFT5.21%
Amazon.com IncAMZN2.97%
Alphabet Inc. Cl AGOOGL1.80%
Tesla Inc.TSLA1.75%
Meta Platforms Inc.FB1.64%
Alphabet Inc. Cl C.GOOG1.61%
Berkshir Hathaway Inc. Cl BBRK.B1.05%
UnitedHealth Group IncUNH0.98%

SWTSX VS VTSAX: Compositions

As mentioned earlier, both SWTSX and VTSAX hold small-cap, mid-cap, and large-cap funds. Similar to the top 10 holdings above, the distribution of each of the cap types is very similar within both funds.

Currently, the composition for VTSAX looks like this:

Small-Cap – 6.4% of total holdings

Mid Cap – 17.5% of total holdings

Large Cap – 76.2% of total holdings

And the current composition for SWTSX looks like this:

Small-Cap – 6.3% of total holdings

Mid Cap – 17.5% of total holdings

Large Cap – 76.2% of total holdings

As with any fund, rebalancing is done periodically. However, since neither of these funds is actively managed, the compositions for each won’t move much. The only difference you’ll see above is that the large-cap and small cap numbers are slightly different. This is likely due to the difference in each fund’s total number of stocks (3000 vs. 3600).

SWTSX VS VTSAX: Sector Allocations

Maybe not so much in this case, but when selecting a fund to invest in, it’s typically a good idea to know what sectors that fund is invested in. If you think the primary holdings are in a sector due for a correction or to struggle for any reason, you might want to avoid that fund. Seeing that these funds aim to track the entire market, their industry exposures are similar. 

SWTSX Sector Allocations:       VTSAX Sector Allocations:

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As you can see, they are both very similar in which sectors each fund is exposed to and how much exposure they have in each sector. Not surprisingly, technology is the top industry for both, followed by finances. Each of those sectors carries some heavy hitters in the Dow Jones Industrial Average, so it makes sense those are the highest two sectors.

SWTSX VS VTSAX: Overall Performance

It should come as no surprise that the overall performance of each of these funds is almost identical as well. Seeing that they both have similar compositions, holdings, and exposures, the overall performance reflects that.

SWTSX Overal Performance:           VTSAX Overall Performance:

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Again, the slight difference in performance is likely due to those 600 or so extra small-cap holdings in the VTSAX vs. SWTSX. Investing in either would give you very similar capital-gains.

SWTSX vs VTSAX: Which is better?

Choosing which one of these funds is better is basically splitting hairs at this point. The VTSAX has slightly better performance numbers, but if you recall, SWTSX has a slightly lower expense ratio. So we are likely talking about a minor difference in overall return in either case. 

The fact of the matter is both these funds are great investments with over 14% returns over the long-term investment period of 10 years. The trick is you need to start investing in the first place! Really, you can go wrong here; both are very solid investments.

SWTSX VS VTSAX: Final Thoughts

Historically, there isn’t much difference when it comes to SWTSX vs VTSAX. Nearly identical in every aspect, starting from their expense ratios to their holdings, sector exposure, and finally, their overall performance. Both are low cost funds with little to no management fee to speak of. The only real difference is how much in asset under managements for each fund, but that should hardly change your decision. Either would be an excellent investment. Many investors will have money in both.