Which Is the Better Broad-Market ETF, Schwab's SCHB or State Street's SPTM?
Written by Robert Izquierdo for The Motley Fool -> Both the State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF and Schwab U.S. Broad Market ETF offer identical 0.03% expense ratios for broad market exposure. The Schwab U.S. Broad Market ETF holds 2,410 stocks, prov
Both the State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF and Schwab U.S. Broad Market ETF offer identical 0.03% expense ratios for broad market exposure.
The Schwab U.S. Broad Market ETF holds 2,410 stocks, providing deeper reach into the equity market than the 1,512 companies in the State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF.
The State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF has delivered a slightly higher total return over the last five years and experienced a smaller maximum drawdown.
The choice between the State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (NYSEMKT:SPTM) and Schwab U.S. Broad Market ETF (NYSEMKT:SCHB) depends on whether an investor seeks exposure to 1,512 established firms or a broader basket of 2,410 companies.
Both funds serve as core building blocks for U.S. equity exposure. While SPTM tracks the S&P Composite 1500, SCHB follows the Dow Jones U.S. Broad Stock Market Index. They aim to capture the vast majority of the investable domestic market at the lowest possible cost for long-term investors.
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
These ETFs are among the most affordable in the category, each charging an expense ratio of 0.03%. Both funds delivered identical one-year returns of 24.9% through June 8.
The Schwab U.S. Broad Market ETF provides exposure to 2,410 stocks, reaching deeper into the small-cap segment than its counterpart. Its sector allocation is led by technology at 37%, financial services at 11%, and communication services at 10%. Its largest positions include Nvidia (NASDAQ:NVDA) at 6.99%, Apple (NASDAQ:AAPL) at 6.33%, and Microsoft (NASDAQ:MSFT) at 4.34%. This fund, launched in 2009, has a trailing-12-month dividend of $0.30 per share.
