Author Topic: SCHD VS VTI  (Read 2056 times)

HankWilliams

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SCHD VS VTI
« on: July 20, 2023, 03:28:34 PM »
Curious your thoughts.... Thanks!

MustacheAndaHalf

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Re: SCHD VS VTI
« Reply #1 on: July 20, 2023, 05:40:53 PM »
2012-2021, VTI 16.29%/yr beat SCHD 15.34%/yr
2013-2022, SCHD 13.73%/yr beat VTI 12.07%/yr
https://www.portfoliovisualizer.com/

If you expect recession, maybe 2022 is similar
(VTI -19.51% vs SCHD -3.23%)

This year is mostly a recovery so far
(VTI +19.76% vs SCHD +0.38%)
« Last Edit: July 20, 2023, 05:43:22 PM by MustacheAndaHalf »

Car Jack

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Re: SCHD VS VTI
« Reply #2 on: July 21, 2023, 07:59:58 PM »
To me: VTI already spills too much in dividends, increasing my taxes uselessly.

SCHD purposely spills even more dividends which would make my taxes increase.

If you were to do dividend re-investment, every dividend spilling, you're now getting new stock from the new date so you can't sell with LTCG for a year.

CurledMoss

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Re: SCHD VS VTI
« Reply #3 on: August 18, 2023, 05:45:28 AM »
Not enough information on what you want to do. But sense inception VTI has done better. While SCHD has less volatile. SCHD also has more dividends/distributions which is a tax drag in a taxable account. This is one of those apples and orange scenarios. Both are good.

SCHD has only 100 companies in it. While VTI is over 3000. This sounds like a big difference however VTIs top 10 probably make a huge % of overall portfolio. Which makes this number deceiving. I could look it up and compare the more on that but I'm feeling lazy ha.
« Last Edit: August 18, 2023, 05:47:35 AM by CurledMoss »

Stimpy

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Re: SCHD VS VTI
« Reply #4 on: August 18, 2023, 07:33:43 AM »
I own both, and drip both.....   

If your asking which is better... that all depends on what you want.  The funds themselves have different goals, and preform on different levels.  I can't tell you which is better overall as everybody has different goals.  Mine, mean I can and do own them both so... 

As for taxes...  If you care, it's better to have them in an IRA or 401k.  Otherwise, as stated, the dividend is taxed but honestly...  It's not that much of a hassle imo.   But that's just how I roll.

HankWilliams

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Re: SCHD VS VTI
« Reply #5 on: August 22, 2023, 06:35:26 AM »
So at 48, I'm basically Coast FIRE with about 80% VTI/20% other stocks in my Roth, trad, and HSA. I've just been drinking the dividend koolaid to get me till 59.5.

In one of my taxable account, I now have 615 shares of SCHD. But I'm second guessing myself since I've been on a VTI/Jim Collins path since 2015ish.

I guess the question is... to get to that 59.5 age, which is better for Coast/Barista FIRE to live off of.... VTI's growth (and selling a bit each year) or SCHD's dividends.

I prob need to get a better bird's eye view of the tax implications as yall mentioned. Thanks for the feedback.

Die_Wealthy

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Re: SCHD VS VTI
« Reply #6 on: September 21, 2023, 10:24:06 PM »
I own both, and drip both.....   

If your asking which is better... that all depends on what you want.  The funds themselves have different goals, and preform on different levels.  I can't tell you which is better overall as everybody has different goals.  Mine, mean I can and do own them both so... 

As for taxes...  If you care, it's better to have them in an IRA or 401k.  Otherwise, as stated, the dividend is taxed but honestly...  It's not that much of a hassle imo.   But that's just how I roll.

Can I ask you on what you mean it depends what you want?

I own VTI, however, I'm already 33 and don't make a ton of money. I save about 60% every check currently but want something that will rapidly grow at a more aggressive rate. I'm much further behind than I would like to be due to poor life choices in my 20's and instability during the pandemic years.

My thought process is if I invest and switch over to SCHD, I can buy more of it for cheaper, which means I accumulate more in dividends this year than I would with VTI. VTI was a little easier to buy pre-pandemic, but now that the price is north of $200 per share, it doesn't seem worth it to me.
I could be mistaken, I'm not intelligent by any means, and I still buy VTI. However, even with higher taxes, it seems like I would be able to grow my 'stache more quickly with a cheaper ETF that pays similar dividends.

Please let me know your thoughts as I greatly value this communities insights.
Thank you


2Birds1Stone

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Re: SCHD VS VTI
« Reply #7 on: September 21, 2023, 10:30:24 PM »
Share price literally means nothing (in nominal terms), with the ability to buy fractional shares, it doesn't matter if VTI is $214 or $2,140 after a reverse 10:1 split, or $21,400 after a reverse 100:1 split.


Stimpy

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Re: SCHD VS VTI
« Reply #8 on: September 22, 2023, 07:59:23 AM »
I own both, and drip both.....   

If your asking which is better... that all depends on what you want.  The funds themselves have different goals, and preform on different levels.  I can't tell you which is better overall as everybody has different goals.  Mine, mean I can and do own them both so... 

As for taxes...  If you care, it's better to have them in an IRA or 401k.  Otherwise, as stated, the dividend is taxed but honestly...  It's not that much of a hassle imo.   But that's just how I roll.

Can I ask you on what you mean it depends what you want?

I own VTI, however, I'm already 33 and don't make a ton of money. I save about 60% every check currently but want something that will rapidly grow at a more aggressive rate. I'm much further behind than I would like to be due to poor life choices in my 20's and instability during the pandemic years.

My thought process is if I invest and switch over to SCHD, I can buy more of it for cheaper, which means I accumulate more in dividends this year than I would with VTI. VTI was a little easier to buy pre-pandemic, but now that the price is north of $200 per share, it doesn't seem worth it to me.
I could be mistaken, I'm not intelligent by any means, and I still buy VTI. However, even with higher taxes, it seems like I would be able to grow my 'stache more quickly with a cheaper ETF that pays similar dividends.

Please let me know your thoughts as I greatly value this communities insights.
Thank you

For this I would have to turn you over to the Summary Prospectus for each to get the details right.   But in a summary VTI is aimed at the market as a whole, and has potential (not realistic potential) to not pay a dividend because of that focus. 
SCHD is specifically aimed at the Dow Jones U.S. Dividend 100 Index, which means it's aimed to always pay that dividend, and has a overall smaller choice of stocks.   

Both will probably hold some similar stocks but how they will prioritize matters is going to be different.   VTI, for instance is not going to ignore a great growth stock that does not pay a dividend, but SCHD will.   And that will effect the overall performance, though only time will tell by how much.

Again I would grab the prospectus for each and read over them.  Those fairly good at using average language to summarize what these funds are about and if that is what your looking in a fund.  The price, while it does matter, shouldn't in the long run, no matter what your overall choice is.  Cause it will go up... and it will go down.   As long as your buying, you will average out ahead in the long run.

SCHD summary prospectus:
http://connect.rightprospectus.com/Schwab/TADF/808524797/SP?site=Funds
VTI summary prospectus: You'll have to choose for the list, a direct link won't work.
https://personal.vanguard.com/us/faces/JSP/Funds/ProspRep/FundProspectusReportsWinJSP.jsp?fundId=0970&isReqFromProducts=true

Die_Wealthy

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Re: SCHD VS VTI
« Reply #9 on: September 22, 2023, 09:04:30 PM »


For this I would have to turn you over to the Summary Prospectus for each to get the details right.   But in a summary VTI is aimed at the market as a whole, and has potential (not realistic potential) to not pay a dividend because of that focus. 
SCHD is specifically aimed at the Dow Jones U.S. Dividend 100 Index, which means it's aimed to always pay that dividend, and has a overall smaller choice of stocks.   

Both will probably hold some similar stocks but how they will prioritize matters is going to be different.   VTI, for instance is not going to ignore a great growth stock that does not pay a dividend, but SCHD will.   And that will effect the overall performance, though only time will tell by how much.

Again I would grab the prospectus for each and read over them.  Those fairly good at using average language to summarize what these funds are about and if that is what your looking in a fund.  The price, while it does matter, shouldn't in the long run, no matter what your overall choice is.  Cause it will go up... and it will go down.   As long as your buying, you will average out ahead in the long run.

SCHD summary prospectus:
http://connect.rightprospectus.com/Schwab/TADF/808524797/SP?site=Funds
VTI summary prospectus: You'll have to choose for the list, a direct link won't work.
https://personal.vanguard.com/us/faces/JSP/Funds/ProspRep/FundProspectusReportsWinJSP.jsp?fundId=0970&isReqFromProducts=true
[/quote]


Thank you for the response. What you said makes sense. I can also see where the taxes can be a huge pain in the butt.

 

Wow, a phone plan for fifteen bucks!