SWISX vs VTIAX: What Are These Funds?
SWISX (Schwab International Index Fund) and VTIAX (Vanguard Total International Stock Index Fund) are popular low-cost mutual funds for investors seeking international stock exposure. Both track broad international equity indexes but differ in structure, geographic coverage, and costs. Below, we break down their key differences to help you decide which aligns with your portfolio goals.
Key Differences Between SWISX and VTIAX
- Expense Ratio: SWISX (0.06%) is cheaper than VTIAX (0.11%).
- Holdings: SWISX tracks the MSCI EAFE Index (developed markets), while VTIAX follows the FTSE Global All Cap ex US Index (includes emerging markets and small-caps).
- Geographic Coverage: SWISX excludes Canada and emerging markets; VTIAX covers 99% of non-U.S. equities worldwide.
- Minimum Investment: SWISX ($1) is more accessible than VTIAX ($3,000).
- Tax Efficiency: VTIAX’s ETF share class (VXUS) may offer better tax-loss harvesting opportunities.
Performance Comparison: SWISX vs VTIAX
Over the past decade, VTIAX’s inclusion of emerging markets has led to higher volatility but slightly better long-term returns in bullish cycles. SWISX, focused on developed markets like Europe and Japan, offers stability but misses growth from regions like Southeast Asia. For example, VTIAX returned 7.2% annually from 2013–2023, compared to SWISX’s 6.5%.
Which Fund Is Right for You?
- Choose SWISX If: You want ultra-low costs, prefer developed markets, or have a small initial investment.
- Choose VTIAX If: You prioritize global diversification, accept slightly higher fees, or want exposure to emerging markets.
FAQ: SWISX vs VTIAX
1. Does SWISX include China or India?
No. SWISX excludes emerging markets like China and India, while VTIAX includes them.
2. Which fund has a lower expense ratio?
SWISX (0.06%) is cheaper than VTIAX (0.11%).
3. Is VTIAX better for diversification?
Yes. VTIAX covers 7,900+ stocks across 46 countries, including small-caps and emerging markets.
4. Can I invest in SWISX with $100?
Yes. SWISX has a $1 minimum, making it ideal for small investors.
5. Which fund is more tax-efficient?
VTIAX’s ETF structure may reduce taxable capital gains distributions.
6. Do these funds pay dividends?
Yes. Both pay quarterly dividends, with VTIAX yielding ~3.1% and SWISX ~2.7% (as of 2023).
