PORTFOLIO
U.S. StoCK FUnDS
Ticker
Vanguard Total Stock Market ETF
Schwab US Broad Market ETF
iShares Core S&P Total U.S. Stock Market E TF
Source: Index Universe, Y TD data as of Nov. 2.
VTI
SCHB
ITOT
Expense
Ratio
0.06% 100 A
0.04% 99 A
0.07% 98 A
Overall
15.51%
15.31%
15.28%
YTD
Return
95 100
91 98
95 77
Efficiency Tradability
0.02% 0.31% 100
0.04% 0.3% 99
0.07% 3.3% 98
Avg.
Spread
Max Disc +
Prem Fit
23. 3
1. 2
0.36
AUM
($B)
international StoCK FUnDS
Vanguard Total International Stock Index E TF
Schwab International Equity E TF
Schwab International Small Cap Equity ETF
Schwab Emerging Markets Equity E TF
iShares Core MSCI Total International E TF
Ticker
Source: Index Universe, Y TD data as of Nov. 2.
VXUS
SCHF
SCHC
SCHE
IXUS
Expense
Ratio
0.18% 95 B
0.09% 92 C
0.20% 72 C
0.15% 72 C
0.16% N/A
Overall
12.04%
12.63%
14.71%
10.93%
N/A
YTD
Return
94 65
78 85
75 81
75 81
N/A N/A
Efficiency Tradability
0.11% 1.25% 95
0.16% 3.38% 92
0.33% 3.37% 72
0.12% 5.27% 72
0.59% N/A N/A
Avg.
Spread
Max Disc +
Prem Fit
0.976
0.990
0.188
0.585
0.063
AUM
($B)
BonD FUnDS
Ticker
Vanguard Total Bond Market E TF
Schwab US Aggregate Bond ETF
iShares Core Total U.S. Bond Market E TF
Source: Index Universe, Y TD data as of Nov. 2.
BND
SCHZ
AGG
Expense
Ratio
0.10% 98 B
0.05% 91 B
0.08% 98 A
Overall
3.71%
3.3%
3.5%
YTD
Return
88 95
91 66
92 95
Efficiency Tradability
0.01% N/A 98
0.08% N/A 91
0.01% N/A 98
Avg.
Spread
Max Disc +
Prem Fit
17. 49
0.315
15. 31
AUM
($B)
and discounts, which Hougan says can
be misleading in this category. As for
Schwab, its fund is too illiquid, with a
spread eight times larger than its counterparts at iShares and Vanguard. Also,
its relatively small size makes tracking
error a concern.
COMMISSIONS AND CONSTRUCTION
There’s one last factor to consider: commissions. While all ETFs generally have
the same commissions within each firm,
each of these three families of ETFs can
be purchased commission-free. Schwab
and Vanguard both waive commissions
for funds bought through their broker-
age operations, while Fidelity waives
commissions on 30 iShares ETFs.
When it comes to selecting narrower ETFs, meanwhile, exercise caution
in portfolio construction. Vanguard’s
emerging market ETF, for instance,
will soon exclude South Korea, which
will be added to its developed market
index fund, while iShares and Schwab
will include it in emerging markets.
Combining an iShares emerging market
E TF with a Vanguard developed market
E TF would have double the exposure to
South Korea.
As expense ratios continue to ap-
proach zero, ETF fee wars have been
great for clients. But look beyond to also
examine the efficiency, tradability and
fit of each ETF in order to build superior
portfolios for your clients. FP
Allan S. Roth, a Financial Planning
contributing writer, is founder of the
planning firm Wealth Logic in Colo-
rado Springs, Colo. He also writes the
Irrational Investor column for CBS
Money Watch.com and is an adjunct
faculty member at the University of
Denver.
