SCHO vs SHY

SCHOASchwab Short-Term U.S. Treasury ETF

SHYBiShares 1-3 Year Treasury Bond ETF

In short

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.

SHY The incumbent slice of the short Treasury curve: about 90 U.S. government notes maturing in one to three years, running since 2002, heavily traded, paying monthly. The established name in its aisle, priced like it.

Stated mandate

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.

SHY The fund seeks to track an index of U.S. Treasury bonds with remaining maturities of one to three years, providing targeted exposure to short-term government debt.

Why people hold it

• 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.

• SHY Pure mandate: the ICE U.S. Treasury 1-3 Year Bond Index, nothing else. Tracking has been about as tight as index funds get, and the credit behind the bonds is the U.S. government's.ishares.com
• Big and busy: a multi-billion-dollar fund that trades actively, so moving in and out of a cash-like sleeve rarely costs much in spread.
• One-to-three-year maturities mean smaller price moves when rates shift than long bonds see, and cash lands monthly rather than quarterly.
• Live since 2002 under iShares, through several full rate cycles, doing the same simple job the whole way.

Worth knowing

• 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.

• SHY Fees are the trade-off: 0.15% here versus 0.03% at VGSH, SCHO and SPTS. BBSB tracks the identical index for 0.04%.
• Treasuries only, short end only. No corporate credit, no long-duration kicker. The plain end of the bond market, by design.
• Short bonds are not a savings account. Prices still dip when short-term rates rise, and the monthly payout floats with them.

Full SCHO profile⁠

Full SHY profile⁠