SCHP vs SPIP

SCHPASchwab US TIPS ETF

SPIPBState Street SPDR Portfolio TIPS ETF

In short

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.

SPIP SPIP owns the whole U.S. TIPS curve in one wrapper: government bonds built to move with inflation, roughly 60 of them, for 0.12% a year. A 2007-vintage, no-gimmick way to rent the real-yield side of Treasuries.

Stated mandate

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

SPIP The fund seeks to track the price and yield performance of the Bloomberg U.S. Government Inflation-Linked Bond Index before fees and expenses, providing exposure to U.S. Treasury inflation-protected securities.

Why people hold it

• 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.

• SPIP Sticks close to its benchmark, the Bloomberg U.S. Government Inflation-Linked Bond Index, and rates as one of the tighter index fits in its broad Treasury peer group.
• Full-curve exposure: short, intermediate and long inflation-protected Treasuries in one ticket, so you skip the maturity-picking.
• 0.12% a year lands right at the median fee for broad Treasury ETFs, on a billion-dollar-plus fund that sees steady everyday volume.
• Trading since 2007, giving it a long live record across both the dead-quiet inflation years and the loud ones.

Worth knowing

• 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.

• SPIP Cheaper versions of the same broad idea exist. VTP charges 0.05%, so SPIP's 0.12% is a real premium for inflation-linked Treasuries.
• Holding long-dated TIPS means real-rate moves push the price around. Inflation protection is not the same thing as price stability.
• Payouts are irregular by design, because inflation accruals on TIPS arrive unevenly. Not a metronome-steady income stream.

Full SCHP profile⁠

Full SPIP profile⁠