DFSD vs SCHJ

DFSD—Dimensional Short Duration Fixed Income ETF

SCHJASchwab 1-5 Year Corporate Bond ETF

In short

DFSD Dimensional's front-of-the-curve bond fund: actively run, rules-driven, and priced at 0.17%, under half the typical bond ETF fee. Mostly investment-grade paper maturing inside five years.

SCHJ Short-dated corporate credit at index-fund pricing. SCHJ tracks the Bloomberg US 1-5 Year Corporate Bond Index for 0.03% a year, sits at the bottom of its category's fee table, and pays monthly.

Stated mandate

DFSD The fund seeks to maximize total returns by investing across the universe of fixed-income securities.

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

Why people hold it

• DFSD At 0.17%, it costs less than half the 0.36% median fee among bond ETFs in its peer group, and that price buys active management, not index tracking.
• Lives at the short end: primarily investment-grade bonds maturing within five years, measured against a 1-5 year US corporate and government benchmark.aaii.com
• Spread across well over a thousand bond positions, so one issuer's trouble barely registers at the portfolio level.
• A multi-billion-dollar fund that trades actively, which tends to keep spread costs modest on everyday-sized orders.

• SCHJ 0.03% a year, against a 0.19% median for investment-grade corporate ETFs. No peer in the cohort charges less.
• Thousands of individual bonds in the basket, so no single issuer's trouble moves the fund much.
• The 1-5 year maturity ceiling means less price swing per move in rates than intermediate corporate funds like VCIT or IGIB, which sit further out the curve.
• Interest is passed through monthly rather than quarterly, and the fund ranks in the top quartile of its investment-grade corporate peer group overall.

Worth knowing

• DFSD Cheap for active, but plain-vanilla index bond funds like BND and SCHZ run 0.03%. The gap is what you pay for the security selection.
• Short maturities cut interest-rate sensitivity in both directions: less damage when yields rise, less lift when they fall.aaii.com
• Payouts follow an irregular schedule rather than a fixed monthly rhythm, so income timing isn't something to set a calendar by.

• SCHJ This is company debt, not Treasuries. Downgrades and defaults are part of the deal, and short maturities shrink that risk without erasing it.
• A mid-size fund with moderate trading volume, so spreads can run wider than at the category's giants. Limit orders matter more here.
• Launched in 2019, so its record is shorter than rivals that traded through earlier credit cycles.

Full DFSD profile⁠

Full SCHJ profile⁠