Treasury ETFs: VGSH Holds Size Edge Over SCHO
Key Points
VGSH and SCHO share identical expenses and similar short-term U.S. Treasury bond strategies
Both funds posted a -0.2% total return over the past year, with nearly matching risk and drawdown profiles
VGSH commands a larger assets under management (AUM), while SCHO holds slightly more positions and is nearly as liquid
Vanguard Short-Term Treasury ETF (NASDAQ:VGSH) and Schwab Short-Term U.S. Treasury ETF (NYSEMKT:SCHO) both track short-term U.S. government bonds, share identical fees and yields, and closely match risk and return histories.
Both funds aim to provide steady income and low volatility by focusing on high-quality, short-duration U.S. Treasury securities. This comparison examines their costs, returns, risk, portfolio makeup, and trading details to help investors see where they differ and where they overlap.
Snapshot (cost & size)
| Metric | VGSH | SCHO |
|---|---|---|
| Issuer | Vanguard | Schwab |
| Expense ratio | 0.03% | 0.03% |
| 1-yr return (as of 2026-03-24) | -0.2% | -0.2% |
| Dividend yield | 4.0% | 4.0% |
| Beta | 0.05 | 0.06 |
| AUM | $32.7 billion | $11.9 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.
VGSH and SCHO are equally affordable, each charging a 0.03% expense ratio, and both offer a 4.0% yield, so neither fund stands out on cost or income potential.
Performance & risk comparison
| Metric | VGSH | SCHO |
|---|---|---|
| Max drawdown (five years) | -5.72% | -5.75% |
| Growth of $1,000 over five years | $948 | $943 |
What's inside
SCHO seeks to track the total return of the short-term U.S. Treasury bond market, holding 98 positions with a typical focus on cash and government securities. The fund has been around for more than fifteen years, and its sector allocation is overwhelmingly in cash and government bonds, with minor allocations to communication services and technology.
VGSH, in contrast, holds 93 U.S. Treasury securities. Both funds avoid credit risk by sticking to government debt, though SCHO’s small exposure to sectors outside government bonds is minimal and unlikely to materially impact risk or return.
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What this means for investors
For investors seeking income and diversification, treasury bond exchange-traded funds (ETFs) can be a key part of many portfolios. Here are how two popular treasury ETFs compare head-to-head.
Ultimately, these funds are very similar, with few meaningful differences. They sport precisely the same expense ratios (0.03%), one year returns (-0.2%), and dividend yield (4.0%). However, there is one difference between the two funds: AUM. VGSH has $32.7 billion in AUM, while SCHO has $11.9 billion in AUM. Therefore, investors may find it slightly easier to buy and sell shares of VGSH compared to SCHO.
In summary, these two treasury ETFs are both viable options for investors seeking exposure to treasury ETFs, with a very slight edge going to VGSH due to its higher AUM.
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