Investments are a risky yet rewarding way to reach your financial goals. This is true for everyone looking to push towards financial independence through sound investment practices. In this review, let’s find out which is the better total market index fund between SWTSX vs. VTSAX.
People who have a long-term investment view tend to invest in funds that can guarantee them year over year value increases. If your investment strategy is aligned with long-term investments and you favor investing in mutual funds, you may want to consider investing in SWTSX vs. VTSAX.
SWTSX is a fund created by Charles Schwab, a highly respected asset management company. As for VTSAX, it was created by Vanguard, which is the largest asset management company in the US. So both of these companies are great asset managers in their own right.
But what are the differences? Which fund is better and which should you go for? In this article, we do a detailed comparative analysis of both funds and leave you to make up your mind about the one to invest in.
Before we proceed, here are some investment platforms that can help you with your investment needs.
- Empower – is a free online platform that helps you track your investments and gives recommendations to pay the lowest fees possible. Read our full Empower review for more information about the platform.
- M1 Finance – is a stock and ETF brokerage that helps you invest in stocks for as low as $100. With no trading or brokerage fees. Check out our M1 Finance review and learn more about the platform’s services and start investing now!
SWTSX: Schwab Total Stock Market Index Fund®
SWTSX refers to Schwab Total Stock Market Index Fund, a mutual fund that tracks the total returns of companies active in the US stock market. This fund measures the assets in the Dow Jones US Stock Market Index. Generally, SWTSX is designed to invest about 80% of net assets into Dow Jones stocks.
SWTSX managers also invest in derivatives, futures, and other types of securities that have long-term value. It is also worthy to note that the entire US stock market that it tracks is measured using the Wilshire 5000 Equity Index.
So if you wish to invest in a mutual fund that will guarantee you long-term value, SWTSX is one of the best ones around. This fund holds about 3,000 different stocks, and the top ten holdings are some of the most profitable stocks in the market. Let’s look at its top ten holdings.
SWTSX top 10 holdings:
| Asset | Percentage |
| Microsoft Corp. | 5.25% |
| Apple Inc. | 5.22% |
| Amazon.com Inc. | 3.22% |
| Tesla Inc. | 1.91% |
| Alphabet Inc. Class A | 1.82% |
| NVIDIA Corp. | 1.73% |
| Alphabet Inc. Class C | 1.71% |
| Meta PLatforms Inc. Class A | 1.67% |
| Berkshire Hathaway Class B | 1.08% |
| JP Morgan Chase & Co. | 1.00% |
VTSAX or Vanguard Total Stock Market Index Fund Admiral Shares is a mutual fund issued by Vanguard Securities, the largest investment manager in the US. This fund tracks the performance index of the overall returns of the stock market. VTSAX tracks stocks in the CRSP Total Market Index by employing an indexing approach. Furthermore, it invests in stocks approximated by the Index.
This fund was issued to investors in 1992 and is one of the first mutual funds in the US to track the entire stock market, including large-cap, mid-cap, and small-cap stocks.
It has a 0.04% expense ratio and holds more than 4,156 different stocks. This holding makes it a highly diversified fund that has earned investors’ trust for nearly three decades.
VTSAX also has an Exchange-Traded Fund (ETF) version, called VTI. We’ve compared VTSAX vs VTI for you as well. You may choose to buy that if you don’t want the mutual fund.
The minimum investment amount for VTSAX is $3,000. Also, note that its holdings cut across different industries, with its top 10 holdings being some of the most profitable companies in the US stock market. Let’s take a look at VTSAX’S top holdings.
VTSAX top 10 holdings:
| Asset | Percentage |
| Microsoft Corp. | 5.24% |
| Apple Inc. | 4.95% |
| Amazon.com Inc. | 3.05% |
| Alphabet Inc. Class A | 1.88% |
| Tesla Inc. | 1.88% |
| Alphabet Inc. Class C | 1.69% |
| Meta Platforms Inc. | 1.62% |
| NVIDIA Corp. | 1.28% |
| JPMorgan Chase & Co. | 1.07% |
| Berkshire Hathaway Class B | 1.04% |
[Related Read: VUG Vs. VOO: A Comparison Of Two Popular ETF Funds]
SWTSX Vs. VTSAX: Key Differences
To better understand how both funds stack up against each other, you need to look at their different features. VTSAX and SWTSX are both mutual funds. However, they both track different indexes. While SWTSX tracks stocks in the Dow Jones Index, VTSAX tracks funds in the CRSP Index.
But even though they are not structured in the same way, they still perform similarly. So this makes it a little confusing for investors to choose based on structure alone.
Then we move on to their expense ratios. SWTSX has the lower ratio of the two at 0.03% compared to VTSAX’s 0.04%. When you compare them to the average mutual fund fee, both are lower, which often floats around the 0.75% mark.
As for their issuer, SWTSX is a Charles Schwab mutual fund, while VTSAX is a Vanguard fund. To invest in VTSAX, you will need a minimum investment of $3,000. This is one area where SWTSX wins as it does not have a high Investment requirement. For just $50, you can buy SWTSX. So VTSAX’s higher minimum requirement may be a turn-off for investors who do not have that much to invest.
However, when reviewing their features in general terms, you will notice that not much separates both funds, especially when considering their performance.
SWTSX Vs. VTSAX: Composition Differences
Let’s look at how these two funds are different in their composition.
| Category | SWTSX | VTSAX |
| Type | Mutual Fund | Mutual Fund |
| Segment | Large Blend US Equity | Large Blend US Equity |
| Issuer | Charles Schwaab | Vanguard |
| Net Assets | $18.56 billion | $1.3 trillion |
| Expense ratio | 0.03% | 0.04% |
| Style | Passive | Passive |
| Dividend Yield | 1.34% | 1.21% |
| Minimum investment | N/A | $3,000 |
SWTSX Vs. VTSAX: Performance Differences
Now, let’s review the performance differences of both funds by tracking them across a decade.
SWTSX Performance & Returns:
| Returns | Percentage |
| YTD Returns | 21.04% |
| 1-Month Return | -1.47% |
| 3-Month Return | 0.37% |
| 1-Year Return | 26.45% |
| 3-Year Return | 20.14% |
| 5-Year Return | 17.44% |
| 10-Year Return | 15.85% |
VTSAX Performance & Returns:
| Returns | Percentage |
| YTD Returns | 24.02% |
| 1-Month Return | -1.06% |
| 3-Months Return | 3.83% |
| 1-Year Return | 26.08% |
| 3-Year Return | 23.69% |
| 5-Year Return | 16.86% |
| 10-Year Return | 16.54% |
As you can see from both tables, both funds have similar records with VTSAX performing slightly better over the last decade. They have also done quite well in the last couple of years, and the prospect for the future is looking positive.
SWTSX Vs. VTSAX: Fees
SWTSX and VTSAX have very low fees. The former has a fee of 0.03%, while the latter has 0.04%. SWTSX has slightly lower fees but compared to the average mutual fund expense ratio of 0.75%, they are both much cheaper.
Above all, both funds are quite affordable as you will not have to spend so much on service charges, unlike other mutual funds.
SWTSX VS. VTSAX: Frequently Asked Questions
Here are some of the more frequently asked questions that will guide you on which fund best suits your investment needs.
Is SWTSX Better Than VTSAX?
That will depend on your preference. Some will prefer SWTSX because it has a slightly lower expense ratio and does not have a minimum investment requirement, unlike VTSAX that has a $3,000 minimum deposit requirement.
Others like VTSAX better, with a slightly higher historical performance. The choice is yours to decide which of the two will be best for you.
Is SWTSX The Same As VTSAX?
They are both the same because they are passed as mutual. Mutual funds, on average, are long-term and retirement investment assets. However, they are structured differently and track different indexes. SWTSX tracks the Dow Jones, while VTSAX tracks the CRSP Index.
Is SWTSX a Good Investment?
Yes, it is a good investment because it has consistently maintained a positive dividend payout that can provide you with passive income streams down the road. Recently, the payout was 1.19%. If you invest in SWTSX with a long-term view, you can expect your investment to be an appreciating asset.
SWTSX Vs. VTSAX – Which Is The Better Total Market Index Fund?
Since you have an investment strategy aligned with a long-term valuation on your chosen investment products and services, either SWTSX or VTSAX is a good option for your investment portfolio. Both can provide you with the needed support for your investment plans. What matters is that you consider either of these mutual funds to take the right step towards financial independence.
Constantly be reminded that every success starts with a decision. And now that both these products have been laid out in front of you, the choice is yours to make. Bearing in mind that you will reap the rewards down the line, it is better to start now so that your financial journey starts sooner rather than later. Buckle up and enjoy the investment ride!
Related Reads:
- VTSAX Vs. VFIAX: Which One Is Better?
- SPY Vs. SPYX – Which Of The Two ETFs Is Better?
- VOO Vs. VOOG – Which One Should You Choose?
- VFIAX Vs. VOO: Index Fund Or ETF – Which Is Better?
- FNILX Vs. FXAIX – Are They Worth It?
Want to start investing with no fees? Start your investment journey with M1 Finance today!
Marjolein is a financial consultant who has built over €4,000 monthly passive income and saves over 70% of her income. Read Radicals’ inspiring story, from stuck in the 9-to-5 to loving life. Feel free to send Radical a message at the bottom of this page