IBII vs SCHP

IBIIBiShares iBonds Oct 2032 Term TIPS ETF

SCHPASchwab US TIPS ETF

In short

IBII Inflation-linked Treasuries with an end date. IBII holds only TIPS maturing in 2032, then winds up and pays out around October 15 of that year: a ladder rung for real-return investors rather than a perpetual bond fund.

SCHP Inflation insurance in the plainest wrapper available: SCHP owns the full maturity range of Treasury inflation-protected bonds and tracks its Bloomberg index for three basis points a year.

Stated mandate

IBII The fund seeks to track an index of U.S. Treasury Inflation-Protected Securities maturing in 2032 and is designed to provide inflation protection with a defined maturity.

SCHP The fund seeks to track, before fees and expenses, the total return of an index composed of inflation-protected U.S. Treasury securities.

Why people hold it

• IBII Defined maturity, like an individual bond: iBonds funds terminate on or about October 15 of the year in the name, which makes rung-by-rung ladder building straightforward.ishares.com
• The inflation-adjusted flavor of the ladder. Most target maturity rungs hold corporates or nominal Treasuries; this one holds TIPS, whose principal moves with inflation.ishares.com
• 0.10% expense ratio, in line with the typical target maturity bond ETF, for a single job: track the ICE 2032 Maturity US Inflation-Linked Treasury Index and pay quarterly.

• SCHP 0.03% a year, a quarter of the typical Treasury-fund fee and level with the cheapest names in the group (VGIT, VCSH).
• One job, done literally: only inflation-linked US Treasuries, whose principal adjusts with the official consumer price index.
• Running since 2010, now a multi-billion-dollar fund that trades actively and hugs the Bloomberg Series-L index closely.
• Passive, no maturity tilt, no manager view: one of the cleaner builds among Treasury ETFs.

Worth knowing

• IBII In the final months the holdings mature into cash and cash-like instruments, so the yield drifts toward money market rates. The endgame is a payout, not a peak.ishares.com
• Narrow by design: just the TIPS issues maturing in 2032. And TIPS cut both ways, since the inflation adjustment can move down when prices fall.ishares.com
• Thinner trading than the corporate rungs of the iBonds lineup, so spreads can matter more on the way in and out. Distributions also vary rather than sitting at a fixed coupon.ishares.com

• SCHP Inflation-linked is not rate-proof. This spans the whole maturity spectrum, so prices move with real yields.
• Distributions are irregular. Coupons sit on an inflation-adjusted principal, so the cash arrives lumpy, not as a steady check.
• About 50 bonds, all Uncle Sam. No credit spread, no corporate yield pickup; inflation and duration are the whole story.

Full IBII profile⁠

Full SCHP profile⁠