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VFIAX vs SWPPX and VTSAX vs SWTSX

edited March 13 in Fund Discussions
What are the differences between the Vanguard 500 Index VFIAX and Schwab 500 Index SWPPX?

I have the same question with Vanguard Total Stock Market Index VTSAX vs Schwab Total Stock Market Index SWTSX.

It appears that the performance of VFIAX vs SWPPX and VTSAX vs SWTSX are almost identical, however, the Tax Cost Ratio on both of Schwab's indexes is higher. Why would this be?

Mona

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  • edited March 13
    Hi @_Mona, think has to do w/ cost and your personal perference. We have the VTI and SPY along w/ Dows-ETFdifferent accounts. May not make a big difference long term except for costs. Every large trading firms are trying to cut down their costs for index next to nothing.

    SCHK is also another good choice for schwab broad market ETF, 0.05% fees if you think costs maybe major concerns
  • I'd give the generic answer that Vanguard is better at running index funds - often holding less cash, trading with an eye to tax implications, etc. But there's an additional reason that Vanguard index funds are more tax efficient. They usually have an ETF share class.

    This means that should the fund generate any cap gains, like any ETF fund it is able to purge those gains. You can see the difference by comparing the cap gains distributions of VFIAX and SWPPX.

    Take a look at Schwab's web page for SWPPX:
    https://www.schwab.wallst.com/schwab/Prospect/research/mutualfunds/summary.asp?symbol=SWPPX

    Under Fund Performance, click on the Dividends & Distributions link.
    You'll see green (cap gains divs) for 2015, 2016, 2017, 2018, and 2019.

    Now look at Schwab's web page for VFIAX.
    https://www.schwab.wallst.com/schwab/Prospect/research/mutualfunds/summary.asp?symbol=VFIAX

    No green - no cap gains dividends.
  • johnN and msf, thanks for your posts.

    Mona
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