FTSD vs SCHO

FTSDCFranklin Short Duration U.S. Government ETF

SCHOASchwab Short-Term U.S. Treasury ETF

In short

FTSD Most short-government ETFs just clone a 1-3 year Treasury index. FTSD's mandate is wider: at least 80% in U.S. government, agency or instrumentality debt, run for current income and capital preservation since 2013.

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

FTSD The Fund seeks high current income consistent with prudent investing and capital preservation, investing at least 80% of net assets in U.S. government, agency, or instrumentality securities.

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

• FTSD The mandate reaches past plain Treasuries into agency and instrumentality paper, with at least 80% of net assets in government-backed debt and a stated goal of income plus capital preservation.
• Short duration by design, so a swing in rates moves it far less than a long bond fund does. Franklin has been running this one since 2013.
• Income lands monthly, and the fund has stuck closely to the mandate its prospectus describes.

• 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

• FTSD 0.25% a year, above the 0.15% cohort median. The big index trackers (VGSH, SCHO, SPTS) charge 0.03%, so the broader government mandate carries a real price tag.
• Thinly traded next to the category heavyweights, which can mean wider spreads on the way in and out.
• The stated aim is current income and capital preservation, not capital growth. This is a short-end parking spot, and it behaves like one.

• 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 FTSD profile⁠

Full SCHO profile⁠