SCHO vs XTWO

SCHOASchwab Short-Term U.S. Treasury ETF

XTWOBBondBloxx Bloomberg Two Year Target Duration US 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.

XTWO Most short-Treasury funds buy a maturity range and let their rate sensitivity wander. XTWO came out of the first suite built the other way: hold US Treasuries to a set two-year duration target, for five basis points.

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.

XTWO The Fund seeks to track an index of U.S. Treasury securities with durations between 1 and 3 years.

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.

• XTWO Costs 0.05% a year, a third of the typical fee in the short-Treasury crowd.
• Targets a duration, not a maturity bucket. Its index is designed to sit near two years of rate sensitivity instead of drifting lower as the bonds inside it age.bondbloxxetf.com
• Launched in 2022 as part of the first target-duration Treasury lineup, spanning six months to twenty years, so you can dial duration up or down inside one family.bondbloxxetf.com
• US Treasuries only, no corporate credit in the mix, and income goes out monthly.

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.

• XTWO One of the less-traded names in its group and modest in size next to SHY or VGSH, so spreads can be wider than the household-name alternatives.
• Two years of duration is not cash. Prices still move when rates do, roughly twice as much as a one-year position, though far less than long bonds.bondbloxxetf.com
• The index-tracking giants (VGSH, SCHO, SPTS) come in a couple of basis points cheaper. You are paying a hair more for the fixed duration target.

Full SCHO profile⁠

Full XTWO profile⁠