Vanguard Short-Term Treasury ETF (VGSH +0.03%) and Schwab Short-Term U.S. Treasury ETF (NYSEARCA:SCHO) both target short-term U.S. Treasury bonds, sharing a 0.03% expense ratio, but SCHO offers a marginally higher yield and slightly lower beta, while VGSH carries more assets under management.
Both funds aim to deliver income with low risk by focusing on high-quality U.S. Treasuries, which makes them both staples for conservative fixed income investors. This ETF comparison highlights differences in cost, yield, risk profile, and portfolio construction.
Snapshot (cost & size)
| Metric | VGSH | SCHO |
|---|---|---|
| Issuer | Vanguard | Schwab |
| Expense ratio | 0.03% | 0.03% |
| 1-yr return (as of 2026-01-23) | 0.8% | 4.92% |
| Dividend yield | 4.95% | 4.06% |
| Beta | 0.26 | 0.26 |
| AUM | $30.38 billion | $12.37 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The one-year return represents total return over the trailing 12 months.
Both funds are equally affordable in terms of fees, but SCHO may appeal to income-focused investors with its marginally higher dividend yield.
Performance & risk comparison
| Metric | VGSH | SCHO |
|---|---|---|
| Max drawdown (5 y) | (5.69%) | (5.71%) |
| Growth of $1,000 over 5 years | $953 | $948 |
What's inside
Schwab Short-Term U.S. Treasury ETF holds 98 positions, mostly in cash and short-dated Treasuries, with a small tilt toward communication services and technology. Its top holdings include Treasury Note (T 0.59%) at 3.45%, Treasury Note (WIT +1.16%) at 1.15%, and Ssc Government Mm Gvmxx (NASDAQ:GVMXX) at 0.10%. With a fund age of 15.5 years, SCHO is a well-established option for those seeking short-duration U.S. government exposure.
Vanguard Short-Term Treasury ETF is similarly focused, holding 93 U.S. Treasury issues with no notable sector tilts—100% cash and government bonds. Its largest positions are United States Treasury Note/Bond 1.50% 01/31/2027 at 1.66%, United States Treasury Note/Bond 4.38% 07/15/2027 at 1.40%, and United States Treasury Note/Bond 3.88% 07/31/2027 at 1.35%. Neither fund involves leverage, foreign currency exposure, or other structural quirks.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Investors are reassessing how to position low-risk capital as interest rate expectations remain unsettled and short-term yields continue to define returns. That makes the choice between the Vanguard Short Term Treasury ETF and the Schwab Short Term U.S. Treasury ETF relevant now, because these funds often serve as the foundation for portfolio stability when uncertainty rises.
Both ETFs are commonly used to preserve capital while earning income linked to short-term U.S. Treasury rates. They are not designed to generate excess returns or express a market view. Instead, they provide liquidity and dampen volatility. Vanguard Short Term Treasury ETF stands out for its larger asset base and long-standing role as a core short-term Treasury holding, while Schwab Short Term U.S. Treasury ETF offers comparable exposure within Schwab’s framework and a slightly different yield profile. Both tend to show limited movement unless rate expectations change meaningfully.
For investors, the Vanguard Short Term Treasury ETF suits those who want a large, widely adopted Treasury core with minimal decision-making. Schwab Short-Term U.S. Treasury ETF suits investors who prefer Schwab’s approach while accepting the same interest-rate risk.
