Schwab Short-Term US Treasury ETF

SCHO

Market cap $11.7B

IGSB charges a slightly higher expense ratio but delivers a marginally higher yield than SCHO. IGSB holds a vastly broader set of investment-grade corporate bonds, while SCHO focuses on short-term Treasuries.

BSV holds a much larger asset base and offers slightly higher recent returns than SCHO. Both ETFs incorporate federally backed bonds, which are among the safest types.

If you're holding cash and want to earn something while you wait, short-term Treasury ETFs like Schwab Short-Term U.S.

Schwab Short-Term US Treasury ETF (SCHO) delivered 4.88% yield over the past year with a 0.03% expense ratio. Inspire Advisors reduced their Schwab Treasury ETF position by 67.7% in Q3 2025 as others increased exposure.

Schwab Short-Term U.S. Treasury ETF (SCHO) offers passive exposure to 1–3 year U.S. Treasury bonds, targeting low-risk portfolio allocation. SCHO's 30-day SEC yield is 3.53%, only marginally higher than 12-month Treasury bills, but with greater duration risk. Given minimal yield advantage and potential rate volatility, I recommend selling SCHO in favor of 9–12 month Treasury bills.

Both ETFs focus on short-term bonds, but SCHO holds mainly U.S. government bonds while VCSH holds primarily corporate bonds. Schwab's ETF holds significantly more higher-rated bonds than Vanguard's fund.

Both ETFs offer identical ultra-low expense ratios, but Schwab Short-Term U.S. Treasury ETF edges out a slightly higher yield VGSH is larger by assets under management, while SCHO shows slightly lower volatility and a similar recent performance track record Portfolio holdings and sector exposures are nearly identical, with minimal quirks or hidden tilts in either fund We're bullish on these 10 stocks ›

Vanguard Short-Term Treasury ETF (VGSH) and Schwab Short-Term U.S. Treasury ETF (SCHO) are both rated Buy for short-term U.S. Treasury exposure. VGSH is slightly superior due to its better liquidity, larger fund size, and higher 30-day SEC yield compared to SCHO. Both ETFs offer low expense ratios, minimal volatility, and are well-positioned for the current uncertain interest rate environment.

Schwab Short-Term U.S. Treasury ETF offers short-duration Treasury exposure but faces a shifting macro environment as rate cuts accelerate. It has underperformed intermediate and long-duration peers this year, reflecting changing rate expectations and narrowing yield advantages for short maturities. Persistent inflation and a weakening labor market are prompting the Fed to shift priorities, likely resulting in faster rate cuts and reduced SCHO income potential.

Bond ETFs like SGOV and SCHO gain traction as Treasury yields sink to three-year lows, reflecting rising investor caution amid mounting market stress.