FFIU vs SCHZ

FFIUDUVA Unconstrained Medium-Term Fixed Income ETF

SCHZASchwab U.S. Aggregate Bond ETF

In short

FFIU A go-anywhere bond fund with a human at the wheel: no index to track, just an active manager picking across the fixed income market for current income. It has been running since 2017.

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

FFIU The Fund seeks current income with limited risk to principal by investing mainly in fixed income securities of any kind. It normally invests at least 80% of assets in those securities.

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

• FFIU Unconstrained means unconstrained: no benchmark to hug, and the prospectus allows fixed income of any kind, plus up to 20% in futures, options, cash or other funds.sec.gov
• Built for income, not fireworks. At least 80% of assets sit in fixed income, the stated aim is current income with limited risk to principal, and cash goes out quarterly.sec.gov
• Trading since 2017, so there is a real multi-year record across very different rate environments rather than a backtest.

• 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

• FFIU Costs 0.54% a year, above the roughly 0.36% median for core bond ETFs and well above index giants like BND, SPAB and SCHZ at 0.03%.
• Small and thinly traded, which usually means wider bid-ask spreads and more gap between your fill price and the fund's underlying value.
• Outcomes hinge on the manager's judgment rather than a published index, so there is no benchmark to measure the portfolio against day to day.

• 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 FFIU profile⁠

Full SCHZ profile⁠