SCHO vs VGSH

SCHOASchwab Short-Term U.S. Treasury ETF

VGSHAVanguard Short-Term Treasury 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.

VGSH Plain one-to-three-year Treasuries for three basis points, running since 2009. No credit story, no active twist: VGSH owns the short end of the government curve and charges about as little as this category allows.

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.

VGSH The fund seeks to track a market-weighted Treasury index with a short-term dollar-weighted average maturity.

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.

• VGSH 0.03% a year, against a 0.15% median for 1-3 year Treasury funds. Same fee floor as SCHO and SPTS, and a fifth of what SHY charges for the same slice of the curve.
• Sticks tightly to the Bloomberg U.S. Treasury 1-3 Year Index, one of the closest-tracking implementations in its peer group.
• Roughly 90 US Treasury issues, sampled to match the index. No corporates, no mortgages, no derivatives overlay: the only credit question is the US Treasury itself.
• Pays monthly, and the income resets as short notes mature and newer ones roll in, so it moves with prevailing short-term rates. A multi-billion-dollar fund that trades actively.

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.

• VGSH Short maturities soften rate moves, they don't erase them. Prices still fall when yields rise, and the fund itself has no maturity date the way a single note does.
• At the short end the cost race is a tie, not a win: SCHO tracks the same index for the same 0.03%. Differences show up in trading and plumbing, not the fee line.
• Nothing here reaches for yield: no corporate credit, no inflation linkage, no long bonds. That narrowness is the design, and it behaves nothing like a core bond fund.

Full SCHO profile⁠

Full VGSH profile⁠