SCHZ vs VCRB

SCHZASchwab U.S. Aggregate Bond ETF

VCRBAVanguard Core Bond ETF

In short

SCHZ Schwab's core bond holding: the broad U.S. investment-grade bond market, over 10,000 issues deep, for 0.03% a year. That is the floor of a category whose median fee is more than ten times higher. Running since 2011, pays monthly.

VCRB Vanguard's active answer to its own index bond giant: VCRB roams the US investment-grade market looking to beat the Bloomberg US Aggregate Float Adjusted Index, and charges 0.10% to try.

Stated mandate

SCHZ The fund seeks to track the total return of an index representing the broad U.S. investment-grade bond market.

VCRB The fund seeks to outperform the broad U.S. investment-grade fixed-income market, measured by the Bloomberg US Aggregate Float Adjusted Index, by investing across fixed-income securities with different maturities, yields, and qualities.

Why people hold it

• SCHZ 0.03% a year sits at the category floor, against a cohort median of 0.36%. Only a short list of aggregate-bond funds matches it, including AGG, BND and SPAB.
• Tracks the Bloomberg US Aggregate Bond Index tightly, one of the cleanest index implementations among the 187 funds in its peer group.schwabassetmanagement.com
• One ticker, thousands of investment-grade U.S. bonds, income paid monthly. The plumbing of a bond portfolio without buying a single bond yourself.
• Live since 2011 and now a multi-billion-dollar fund that trades actively, so trading costs on ordinary retail-sized orders tend to be minor.

• VCRB Active management at near-index pricing: 0.10% a year, against a typical core-bond fee closer to 0.36%.
• Clear scorecard. It is measured against the same Bloomberg US Aggregate Float Adjusted Index that Vanguard's index fund BND simply tracks, so the active bet is easy to judge.
• Wide net: roughly 1,600 bonds across different maturities, yields and credit qualities, with income paid monthly.
• Already a multi-billion-dollar, actively traded fund, which is rare for a young active bond ETF.

Worth knowing

• SCHZ This is duration exposure, not a cash substitute. Interest-rate moves, not credit selection, drive most of the ride, and that is the weakest part of its risk profile.
• Investment grade and U.S. only: no high-yield, no foreign bonds. Funds like BNDX cover the international side of the cohort.
• The aggregate-bond aisle is commoditized. Against AGG, BND and SPAB at the same 0.03%, the differences come down to index variant and where you already custody, not fee.

• VCRB Active means human calls. Returns can drift from the benchmark in either direction, unlike the index route BND takes at 0.03%.
• US investment-grade only. No international sleeve, no high-yield kicker, and like any core bond fund it moves with interest rates.
• Launched December 2023, so its live record is short next to core bond funds with decades behind them.

Full SCHZ profile⁠

Full VCRB profile⁠