SCHP vs TIP

SCHPASchwab US TIPS ETF

TIPBiShares TIPS Bond 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.

TIP The 2003-vintage TIPS fund: roughly 50 inflation-linked Treasuries, tracked tightly and traded heavily. You pay up for that depth, because cheaper TIPS wrappers now exist.

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.

TIP The fund seeks to track an index of inflation-protected U.S. Treasury bonds, providing fixed-income exposure and a potential hedge against inflation.

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.

• TIP Owns the inflation-linked Treasury market straight: about 50 TIPS, where the hedge is built into the bonds themselves rather than layered on with derivatives.ishares.com
• A multi-billion-dollar fund that trades actively and stays very close to its benchmark, the ICE U.S. Treasury Inflation Linked Bond Index.
• Trading since 2003, one of the longest-tenured inflation-linked bond funds on the market, with a large iShares fixed-income operation behind it.

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.

• TIP At 0.18% a year it runs above the median Treasury fund in its group, and SCHP covers similar TIPS ground for 0.03%.
• Inflation protection is not price protection. The index spans the full TIPS curve, including long maturities, so rising real yields drag on the share price.ishares.com
• Payouts arrive on an irregular schedule and move with inflation accruals, so income here behaves less like a steady coupon than a nominal bond fund's.

Full SCHP profile⁠

Full TIP profile⁠