BOXX vs SCHO

BOXXBAlpha Architect 1-3 Month Box ETF

SCHOASchwab Short-Term U.S. Treasury ETF

In short

BOXX A T-bill fund that owns no T-bills. BOXX builds its 1-3 month Treasury bill payoff out of exchange-listed box spread options, so the return shows up in the share price instead of a stream of interest payments.

SCHO Short Treasuries, stripped to the studs: roughly 100 US government bonds maturing in one to three years, wrapped in a 0.03% fee. Running since 2010, and one of the tighter builds in its corner of the bond market.

Stated mandate

BOXX The fund seeks to match or exceed, before expenses, the price and yield performance of the 1–3 month segment of the U.S. Treasury bill market.

SCHO The fund seeks to track, before fees and expenses, the total return of an index representing the short-term U.S. Treasury bond market.

Why people hold it

• BOXX No bills in the box: the fund stacks long and short exchange-listed options (long call plus short put at one strike against the reverse at another) into a payoff that behaves like short-term fixed income.alphaarchitect.comalphaarchitect.com 2
• Nothing drips out along the way. A box spread throws off no coupon, so the fund has not been paying regular income distributions; the issuer frames it as an options-based alternative to an ultrashort bond position.alphaarchitect.com
• A multi-billion-dollar fund that trades actively, and it has stuck closely to the 1-3 month bill market it benchmarks against, which puts it in the upper half of its short-Treasury peer group.

• SCHO 0.03% a year, a fifth of the 0.15% on the category's best-known fund, SHY. When every fund in the aisle owns the same Treasuries, the fee is the main lever.
• Pure government paper: the Bloomberg US Treasury 1-3 Year Index, tracked very closely. No corporate bonds, no credit spread dressed up as yield.schwabassetmanagement.com
• A multi-billion-dollar fund that trades actively and pays income monthly, so entering and exiting rarely means wrestling the spread.
• Live since 2010 and among the strongest implementations in the short-Treasury peer group, which matters in a slice of the market where execution is the whole game.

Worth knowing

• BOXX You pay for the plumbing: 0.19% net of a waiver through February 1, 2027 (0.24% gross), near the category median but above plain bill trackers SPTS, SCHO and VGSH at 0.03%.etfarchitect.com
• The tax angle is not settled. The prospectus itself flags that the tax code offers no clear guidance for this strategy, so the treatment of gains could change or be challenged.etfarchitect.com
• Actively managed, not index-tracking: the payoff rests on the manager rolling box spreads in the listed options market rather than on a portfolio of Treasuries.alphaarchitect.com

• SCHO Bonds, not cash. One to three year maturities still reprice when rates move, so the share price wobbles instead of sitting flat.schwabassetmanagement.com
• Income floats with short-term Treasury yields rather than locking in, so the monthly payout moves up and down as rates do.
• The 0.03% fee is a three-way tie with VGSH and SPTS, and VGSH tracks the identical index, so cost alone will not separate them.

Full BOXX profile⁠

Full SCHO profile⁠