What if you could own a small piece of every publicly traded company in the U.S. for three cents per $100 invested per year? That is essentially what the Schwab Total Stock Market Index Fund (SWTSX) offers.
SWTSX is one of the broadest and cheapest mutual funds available to U.S. investors. Whether it belongs in your portfolio depends on what you are trying to accomplish and which type of account you are investing from.
What Is SWTSX?
SWTSX is a mutual fund that tracks the Dow Jones US Total Stock Market Index. This index covers virtually all publicly traded U.S. stocks, including large-cap, mid-cap, small-cap, and micro-cap companies. As of 2026, the fund holds approximately 3,500 individual stocks.
Because it holds such a large slice of the U.S. market, SWTSX gives you exposure to companies of every size and sector. Large tech companies like Apple and Microsoft make up the biggest chunk of the fund, but smaller companies are also included.
Key Fund Details
- Expense ratio: 0.03% per year
- Minimum investment: None (when purchased through Schwab)
- Index tracked: Dow Jones US Total Stock Market Index
- Number of holdings: Approximately 3,500
- Fund type: Mutual fund
- Available at: Schwab (and some other brokers)
How It Works
Like all index mutual funds, SWTSX is passively managed. The fund simply holds the stocks in the index it tracks, weighted by market cap. The largest companies, like Apple, Microsoft, and Nvidia, have the biggest weight. Small and micro-cap companies have much smaller weights.
Because there is no active stock-picking, costs stay extremely low. The 0.03% expense ratio means you pay $3 per year for every $10,000 invested.
As a mutual fund, SWTSX prices once per day at the net asset value (NAV) calculated after the market closes. You place your order during the day, but the price you receive is set at 4 p.m. Eastern time. You cannot trade it in real time the way you can an ETF.
SWTSX vs SCHB: Mutual Fund vs ETF
SCHB is Schwab's total stock market ETF. It tracks a similar but slightly different index and covers roughly 2,500 stocks compared to SWTSX's 3,500. The broader Schwab ETF lineup also includes sector, dividend, and international funds that pair well with either SWTSX or SCHB as a core holding. Here is how they compare:
| Feature | SWTSX (Mutual Fund) | SCHB (ETF) |
|---|---|---|
| Expense ratio | 0.03% | 0.03% |
| Minimum investment | None | ~$25-30 per share |
| Trading | End of day NAV | Intraday |
| Holdings | ~3,500 | ~2,500 |
| Tax efficiency | Good | Slightly better |
| Auto-invest | Easy (dollar amounts) | Manual or DRIP |
Both funds charge the same expense ratio. The key differences are in trading and tax efficiency. For a broader look at how mutual fund vs ETF structures compare on cost, taxes, and minimums, that guide covers the tradeoffs in full.
SCHB is an ETF, which means it trades throughout the day and is generally more tax-efficient in taxable accounts. Mutual funds can occasionally distribute capital gains to shareholders, creating an unexpected tax event. ETFs rarely do this.
SWTSX is simpler to automate. You can set up a recurring contribution of exactly $500 per month without worrying about share prices. With an ETF, you either buy whole shares or need a broker that supports fractional share investing.
When to Choose SWTSX
SWTSX makes the most sense if you are investing inside a tax-advantaged IRA or 401(k), where tax efficiency differences between mutual funds and ETFs do not matter. The mutual fund structure makes dollar-amount auto-investing very straightforward.
It also works well for investors who prefer the simplicity of mutual funds and do not care about real-time trading. If you are a long-term buy-and-hold investor making regular contributions, the inability to trade intraday is rarely a drawback.
SCHB may be the better choice if you are investing in a taxable brokerage account, where the ETF's tax efficiency advantage is more meaningful. If you are also considering Vanguard as a platform, a guide to index investing with Vanguard covers how its total market options compare.
How to Invest in SWTSX
SWTSX is available directly through Schwab with no minimum investment and no transaction fees. You can open a Schwab brokerage account, a Schwab IRA, or a Schwab Roth IRA and add SWTSX as a holding. Schwab also offers SWPPX, its dedicated Schwab S&P 500 fund, for investors who prefer to track just the 500-stock index rather than the full market.
If you prefer a platform that combines commission-free ETF access with IRA account options and bonus features, consider Robinhood. While SWTSX itself is a Schwab mutual fund not available on Robinhood, you can access the ETF equivalent SCHB through Robinhood commission-free, including fractional shares. Robinhood also offers IRA accounts with a 1% match on contributions.
All investments carry risk, including the possible loss of principal. Past performance does not predict future results.
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Pros and Cons of SWTSX
Pros:
- Extremely low 0.03% expense ratio
- No minimum investment at Schwab
- Covers approximately 3,500 U.S. stocks, one of the broadest options available
- Easy to automate with dollar-based recurring contributions
- Simple to use for beginners
Cons:
- Only available as a mutual fund (no ETF version with the exact same index)
- Less tax-efficient than ETFs in taxable accounts
- Prices once daily, not in real time
- Primarily accessible through Schwab
Who SWTSX Is For
SWTSX is a strong fit for long-term investors who want maximum U.S. market coverage at minimal cost. It works especially well inside a Schwab IRA or 401(k) plan where the tax efficiency difference versus an ETF does not matter.
If you want the same broad market exposure in ETF form, SCHB from Schwab or VTI from Vanguard are the closest equivalents and carry the same 0.03% expense ratio. For a comparison between two popular total market ETFs across fund families, the FZROX vs VTI guide is worth reading if you are also considering Fidelity's zero-cost option.
Frequently Asked Questions
What index does SWTSX track?
SWTSX tracks the Dow Jones US Total Stock Market Index, which covers virtually all publicly traded U.S. companies across all market capitalizations, from large-cap giants to micro-cap stocks. The fund holds approximately 3,500 stocks.
Is there a minimum to invest in SWTSX?
No. When purchased through a Schwab account, SWTSX has no minimum investment requirement. You can start with any dollar amount. This makes it one of the most accessible total stock market funds available.
What is the difference between SWTSX and SCHB?
SWTSX is a mutual fund that tracks the Dow Jones US Total Stock Market Index with about 3,500 holdings. SCHB is an ETF that tracks the Dow Jones US Broad Stock Market Index with about 2,500 holdings. Both charge 0.03% per year. SCHB trades intraday and is slightly more tax-efficient in taxable accounts. SWTSX is easier to automate with dollar-amount contributions.
Is SWTSX a good long-term investment?
For most long-term investors, a low-cost total stock market index fund like SWTSX is a solid core holding. It provides broad diversification across the U.S. economy at minimal cost. However, investing always carries risk, and there is no guarantee of positive returns. Consider your risk tolerance and time horizon, and consider consulting a financial advisor if you have questions about your specific situation.
