ETF Evaluator: Schwab Short-Term US Treasury ETF™ (SCHO) Follow This ETF

Schwab Short-Term US Treasury ETF™ Overview

Schwab Short-Term US Treasury ETF™ (SCHO) is a passively managed Taxable Bond Short Government exchange-traded fund (ETF). Schwab ETFs launched the ETF in 2010.

The investment seeks to track as closely as possible, before fees and expenses, the total return of the Bloomberg U.S. Treasury 1-3 Year Index. The fund will invest at least 90% of its net assets (including, for this purpose, any borrowings for investment purposes) in securities included in the index. The index includes all publicly-issued U.S. Treasury securities that have a remaining maturity of greater than or equal to one year and less than three years, are rated investment grade, and have $300 million or more of outstanding face value. The securities in the index must be denominated in U.S. dollars and must be fixed-rate and non-convertible.

About Schwab Short-Term US Treasury ETF™ (SCHO)

There are 2 members of the management team with an average tenure of 8.10 years: Steven Hung (2026) and Matthew Hastings (2010). Management tenure is more important for actively managed ETFs than passive index ETFs.

The ETF has 2 primary benchmarks: Bloomberg US Agg Bond TR USD index with a weighting of 100% and Bloomberg US Treasury 1-3 Yr TR USD index with a weighting of 100%. Schwab Short-Term US Treasury ETF™ has 97 securities in its portfolio. The top 10 holdings constitute 14.5% of the ETF’s assets. The ETF meets the SEC requirement of being classified as a diversified fund. The ETF is not considered to have an ESG focus with its investment selection and management.

Schwab Short-Term US Treasury ETF™ is part of the Fixed Income global asset class and is within the Taxable Bond ETF group. Schwab Short-Term US Treasury ETF™ has 0.0% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 0.0% There is 0.0% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 99.9% (99.9% domestic bond, 0.0% foreign bond and 0.0% convertible bond). Schwab Short-Term US Treasury ETF™ has 0.1% of the portfolio in cash.

Assets Under Management

The fund has $12 billion in total assets, which is above the $3 billion average for the Short Government category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.

SCHO Performance and Fees

The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The Schwab Short-Term US Treasury ETF™ expense ratio is low compared to funds in the Short Government category. Schwab Short-Term US Treasury ETF™ has an expense ratio of 0.03%, which is 80% lower than its category average, making the fund expense ratio grade a A. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.

High portfolio turnover can translate to higher expenses and lower aftertax returns. Schwab Short-Term US Treasury ETF™ has a portfolio turnover rate of 67%, which indicates that it holds its assets around / 0.0 years. By way of comparison, the average portfolio turnover is 192% for the Short Government category.

Recently, in the month of June 2026, Schwab Short-Term US Treasury ETF™ returned 0.0%, which earned it a grade of F, as the Short Government category had an average return of 0.1%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all ETFs in that category.

Schwab Short-Term US Treasury ETF™ has a trailing yield of 3.90%, which is below the 4.29% category average. The fund normally distributes its income monthly.

It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.

Schwab Short-Term US Treasury ETF™ Grades

Year to date, the ETF has returned 0.6%, 0.5 percentage points worse than the category, which translates into a grade of C. The fund has returned 2.9% over the past year (grade of C), 4.3% over the past three years (grade of C) and 1.9% per year over the past five years (grade of D) and 1.7% per year over the past 10 years (grade of D).

For more ETF grades, analysis and screening tools to help your investment discovery, join AAII for a $2, full-access trial. Learn more here: https://invest.aaii.com/membership.

Otherwise, for more information about Schwab Short-Term US Treasury ETF™, including its riskiness, submit your email to unlock the rest of the article.