What do expense ratios tell me about the costs of investing in short-term government ETFs?

The expense ratio represents the annual fee charged by the fund to manage assets. SCHO and VGSH both have an expense ratio of 0.03%. This low fee structure is typical for short-term government bond ETFs. Since the ratios are identical, there is no cost difference between these two funds regarding management fees. It is crucial to understand this fee because it directly impacts net returns over time. A lower expense ratio generally means more of the fund's gross return is preserved for the investor. Comparing this specific fee helps investors understand the baseline cost structure for short-term government exposure in the ETF market.

What does 'Short Government' mean for the investment strategy of these ETFs?

Both SCHO and VGSH are categorised as 'Short Government' funds. This indicates they invest primarily in U.S. government bonds with shorter maturities, typically ranging from one to five years. Shorter durations generally offer less sensitivity to interest rate changes compared to long-term bonds. While these ETFs aim to track short-term U.S. Treasury obligations, their respective index tracking is not available. This strategy provides stability and lower volatility than equity investments. Investors look to these funds for consistent, modest returns. The 'Short Government' designation helps investors identify these assets as a defensive component of a portfolio, focusing on capital preservation and income generation over long-term growth.

How similar are the portfolios held by Schwab Short-Term U.S. Treasury ETF (SCHO) and Vanguard Short-Term Government Bond ETF (VGSH)?

The SCHO and VGSH portfolios have no shared top-10 holdings. While both are Schwab and Vanguard funds respectively and share the 'Short Government' category, their actual holdings differ. This distinctiveness might reflect different index strategies or tracking methods, as neither fund lists its index tracker. It is important for investors to understand that funds in the same category can have different underlying securities. A lack of overlap suggests different portfolio construction methods by each issuer. This diversification within the 'Short Government' niche is crucial for investors to consider when comparing these two ETFs.

How do the asset sizes of SCHO and VGSH impact their investment options?

SCHO has a net asset size of $15.3 billion, while VGSH has a more substantial net asset size of $34.8 billion. Both of these are substantial funds and are considered highly liquid. A larger asset base may lead to tighter bid-ask spreads and more efficient market operations. However, for investors interested in 'Short Government' ETFs, either fund's scale is sufficient for reliable liquidity and management. This metric does not directly affect the ETF's management quality, but it does contribute to a fund's operational efficiency in the market.

What should investors know about the inception dates of SCHO and VGSH?

Vanguard Short-Term Government Bond ETF (VGSH) has a longer history, having been launched on 19 November 2009. SCHO followed approximately a year later, starting on 5 August 2010. These ETFs both have a considerable operational history in the financial market. The slightly earlier launch date for VGSH means it has been available to investors for a marginally longer period. In practice, this minor difference of a few years is unlikely to influence investment decisions significantly. Both ETFs have matured enough to demonstrate their performance within the short-term government bond sector.

How do the dividend yields compare between SCHO and VGSH?

SCHO has a dividend yield of 3.83%, while VGSH's yield is slightly lower at 3.79%. This difference reflects the specific holdings and the timing of dividend distributions, despite both funds being 'Short Government' ETFs. Dividend yields can fluctuate based on the interest rate environment and fund performance. The difference is marginal, yet it is relevant for income-focused investors. While one might provide a slightly higher distribution, investors must consider this alongside the overall investment strategy. A higher yield does not inherently mean superior performance, as the yield is a snapshot of recent distribution history relative to the share price.

How do dividend distributions work for short-term government ETFs like SCHO and VGSH?

Like most bond ETFs, both SCHO and VGSH pay regular dividend distributions to their shareholders. These distributions primarily derive from the coupon payments of the underlying U.S. Treasury bonds. The funds typically pay these dividends monthly. Since SCHO and VGSH have slightly different underlying holdings, their dividend distributions can vary. SCHO is currently yielding 3.83%, while VGSH yields 3.79%. Both funds operate in the 'Short Government' sector, where distributions reflect the income generated from their specific portfolio composition. Investors should review the fund documents for the precise distribution schedule.

How do investors choose between SCHO and VGSH for a short-term bond allocation?

Both SCHO and VGSH offer short-term government exposure with similar fees. Investors can use this comparison to understand the differences in asset size, historical performance, and dividend yield. SCHO's asset base is $15.3 billion, compared to VGSH's $34.8 billion. Both funds' portfolios do not overlap on the top 10 holdings, indicating a different composition strategy by their issuers. The dividend yield for SCHO is 3.83%, while for VGSH, it is 3.79%. While there are minor differences in fund characteristics and dividend yields, both funds are well-established vehicles for gaining exposure to the short-term government bond market.

What is the significance of the fund category 'Short Government' when comparing SCHO and VGSH?

Both SCHO and VGSH fall under the 'Short Government' category, indicating they hold U.S. Treasury obligations with short maturities. This shared category allows for direct comparison across several key metrics, such as expense ratio, dividend yield, and net assets. SCHO and VGSH both charge a 0.03% fee. VGSH has a larger net asset of $34.8 billion, compared to SCHO's $15.3 billion. Their inception dates are also comparable, being only about one year apart. The 'Short Government' category highlights that these funds serve a similar purpose in a portfolio: to provide stable, income-generating short-term bond exposure.

Do SCHO and VGSH have any top-10 holdings in common?

According to the data, SCHO and VGSH do not share any top-10 holdings. While they are both classified as 'Short Government' ETFs, their specific portfolio compositions are unique. This lack of overlap might be due to differences in their tracking methodologies. SCHO has net assets of $15.3 billion and a dividend yield of 3.83%, while VGSH has $34.8 billion and a yield of 3.79%. Despite operating in the same sector with similar fees, these differences in holdings imply that they are tracking separate indices or portfolios. This can provide investors with a way to diversify within a similar asset class.

How does the expense ratio affect the net return of SCHO and VGSH over time?

Both SCHO and VGSH have an expense ratio of 0.03%, which is an annual fee that directly reduces the net return of the funds. The impact of fees on short-term bond returns can be more pronounced than on equity returns because the gross return of short-term bonds is typically lower. SCHO has a dividend yield of 3.83%, while VGSH's is 3.79%. Since both funds have similar yields and the same expense ratio, they are equally efficient in terms of cost. Investors who hold these funds for longer periods should note that the expense ratio can significantly influence the final compounded net return.

SCHO vs VGSH

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare SCHO (Schwab Short-Term U.S. Treasury ETF) and VGSH (Vanguard Short-Term Government Bond ETF) across fees, holdings, dividends and tracking approach. Both charge 0.03%; index focus not available. This page examines how each fund pursues its short-term government mandate. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

SCHO

Metric

VGSH

0.03%

Expense Ratio

0.03%

3.83%

Dividend Yield

3.79%

$15.28B

Net Assets

$34.84B

Holdings

Aug 5, 2010

Inception Date

Nov 19, 2009

–

Index Tracked

–

Short Government

Fund Category

Short Government

Both funds charge the same annual fee.

Shared Top Holdings

These funds do not share any of their top holdings.

Discover More Comparisons

SCHO vs SCHP

Compare SCHO and SCHP ETFs on fees, dividends, and tracking. Both have 0.03% expense ratios. Top holdings and sector weights are currently not available.

SCHO vs SGOV

Compare SCHO and SGOV ETFs on expense ratios, net assets, dividend yields and holdings. Review the Schwab versus iShares short-term Treasury funds objectively.

SCHO vs SCHZ

Compare SCHO and SCHZ ETFs. Both charge 0.03% fees. SCHO offers 3.83% yield; SCHZ provides 4.26% yield. Note missing index and holding data.

Investment Analysis

SCHO

Pros

],
cons
]}

Considerations

]}
]}
]}

VGSH

Pros

]}
]}
]}

Considerations

]}
]}
]}

About SCHO and VGSH

SCHO (SCHO)

The Schwab Short-Term U.S. Treasury ETF (SCHO) provides exposure to U.S. government debt with maturities of between one and three years. Designed as a lower-risk bond holding, it aims to generate income while managing sensitivity to interest rate changes more effectively than long-term treasuries. With a low expense ratio of 0.03%, this fund is a cost-efficient option for investors seeking stability within their portfolios. While it holds a dividend yield of approximately 3.83%, returns are subject to market conditions and do not come with guaranteed outcomes. As with any investment, the value of the fund can fall as well as rise, and investors should consider their own risk tolerance and financial goals before allocating funds.

VGSH (VGSH)

The Vanguard Short-Term Government Bond ETF (VGSH) is an exchange-traded fund designed to help investors gain exposure to a market-weighted index of US government bonds with relatively short maturities. As part of the Vanguard family, it offers a widely recognised approach to bond investing, often characterised by low costs and transparency. The fund’s strategy focuses on shorter-duration government debt, which can be a key component of a diversified portfolio. Investors should note that, as with any investment, values can rise and fall. Interest rates, inflation, and economic conditions can affect both the capital value and the income generated by the fund. The stated expense ratio is 0.03%, and it reports net assets of USD 34.84 billion. It’s important to consider your own circumstances and risk tolerance when evaluating bonds and bond-based ETFs.

Buy SCHO or VGSH in Nemo

🆓

Zero Commission

Trade stocks, ETFs, and more with zero commission. Keep more of your returns.

🔒

Trusted & Regulated

Part of Exinity Group 2015, serving over a million customers globally.

💰

6% Interest on Cash

Earn 6% AER on uninvested cash with daily interest payments.

SCHO vs VGSH

Fund Snapshot