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Rating:Bloomberg Loves When Schwab and Vanguard Face Off Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, June 18, 2013

Bloomberg Loves When Schwab and Vanguard Face Off

News summary by MFWire's editors

Competition can be a beautiful thing. Brutal but beautiful.

For example, Bloomberg examines two really cheap ETFs, one offered by Schwab[profile] and the other by Vanguard [profile]. Schwab, according to the newswire, made waves last September it deeply cut ratios on several ETFs, including the Schwab U.S. Broad Market ETF (SCHB), "which saw expenses cut from 6 to 4 basis points -- or $4 per year for $10,000 invested."

"That made it the cheapest fund since the invention of the first mutual fund in 1924. With expenses now less than the cost of a small pizza, the fund has doubled in size to $2 billion, and is ever-so-slightly outpacing the S&P 500," Eric Balchunas writes.

This fund covers 1,950 U.S. stocks.

However, Balchunas notes, the fund has "lived in the shadow of its biggest rival, the Vanguard Total Stock Market ETF (VTI), a $31 billion ETF."

While the Vanguard fund is slightly more expensive with a 5 basis point fee, it offers broader coverage of 3,183 stocks.

The newswire notes that both funds have done well. SCHB has nearly doubled in size since last September, while VTI has brought in $4.5 billion since that same time, an increase of 17 percent. 

Edited by: Tommy Fernandez


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