BIV vs SCHZ

BIVAVanguard Intermediate-Term Bond ETF

SCHZASchwab U.S. Aggregate Bond ETF

In short

BIV Most bond funds hand you the entire market. BIV picks a lane: investment-grade U.S. government and corporate bonds in the 5-to-10-year band, sampled by Vanguard, priced at three basis points.

SCHZ Schwab's core bond holding: the broad U.S. investment-grade bond market, over 10,000 issues deep, for 0.03% a year. That is the floor of a category whose median fee is more than ten times higher. Running since 2011, pays monthly.

Stated mandate

BIV The fund seeks to track a market-weighted bond index representing the intermediate-term investment-grade U.S. bond market. It uses index sampling and normally invests at least 80% of assets in securities represented by the index.

SCHZ The fund seeks to track the total return of an index representing the broad U.S. investment-grade bond market.

Why people hold it

• BIV 0.03% a year against a category median around 0.36%. In bonds, where returns are mostly coupon math, cost is one of the few levers you fully control.
• You pick the maturity band instead of inheriting it. The benchmark is a 5-10 year government/credit index: no mortgage pools, no 30-year tail dragging the duration around.vanguard.com
• Running since 2007 and among the closest index trackers in its peer group, with the trading depth that comes from a multi-billion-dollar asset base.
• Pays income monthly and spreads it across roughly 300 investment-grade bonds, so no single issuer carries the paycheck.

• SCHZ 0.03% a year sits at the category floor, against a cohort median of 0.36%. Only a short list of aggregate-bond funds matches it, including AGG, BND and SPAB.
• Tracks the Bloomberg US Aggregate Bond Index tightly, one of the cleanest index implementations among the 187 funds in its peer group.schwabassetmanagement.com
• One ticker, thousands of investment-grade U.S. bonds, income paid monthly. The plumbing of a bond portfolio without buying a single bond yourself.
• Live since 2011 and now a multi-billion-dollar fund that trades actively, so trading costs on ordinary retail-sized orders tend to be minor.

Worth knowing

• BIV Intermediate duration cuts both ways. A 5-10 year portfolio reprices harder when yields move than a short-term fund does. Rate sensitivity is the main risk you are taking here.
• This is a slice, not the whole bond market. Aggregate funds at the same 0.03% (BND, SPAB, SCHZ) also carry mortgage-backed and short and long maturities that BIV leaves out.
• Investment-grade only, U.S. only. No high-yield sleeve and no foreign bonds, which is the point of the design but caps what the income stream can come from.

• SCHZ This is duration exposure, not a cash substitute. Interest-rate moves, not credit selection, drive most of the ride, and that is the weakest part of its risk profile.
• Investment grade and U.S. only: no high-yield, no foreign bonds. Funds like BNDX cover the international side of the cohort.
• The aggregate-bond aisle is commoditized. Against AGG, BND and SPAB at the same 0.03%, the differences come down to index variant and where you already custody, not fee.

Full BIV profile⁠

Full SCHZ profile⁠