The Schwab Short-Term U.S. Treasury ETF (SCHO) is an exchange-traded fund designed to track the performance of short-term U.S. Treasury securities. The ETF is managed by Charles Schwab and trades under the ticker SCHO on the NYSE Arca.

Classified as a fixed-income ETF, the fund invests in U.S. Treasury securities with remaining maturities between one and three years. Its strategy provides exposure to high-credit-quality government bonds with lower interest rate sensitivity than longer-duration Treasury securities.

The ETF follows a passive management approach and seeks to replicate the performance of the Bloomberg US Treasury 1–3 Year Index, a benchmark composed of short-term U.S. Treasury securities.

Diversification and sector exposure

SCHO provides exposure primarily associated with:

• U.S. Treasury securities.

• Fixed income.

• Short-term government bonds.

• Sovereign debt.

• High-credit-quality assets.

• Liquidity management.

• Government bond market.

• U.S. dollar.

The portfolio consists of a diversified selection of U.S. Treasury securities across the one- to three-year maturity range, providing broad exposure within the short-term government bond market.

The ETF's performance reflects movements in short-term interest rates and conditions within the U.S. Treasury market.

Structure and costs

SCHO shares trade on the secondary market on the NYSE Arca during regular trading hours. Share creation and redemption occur through authorized participants, a mechanism intended to help align the ETF's market price with its net asset value (NAV).

The fund carries a low expense ratio, consistent with Schwab's ETF lineup, and does not apply a performance fee. Interest income generated by the underlying Treasury securities is distributed periodically to shareholders according to the fund's distribution policy.

Because it invests exclusively in short-term U.S. Treasury securities, the fund carries minimal credit risk, although it remains exposed to changes in interest rates.

History and evolution of the ETF

The Schwab Short-Term U.S. Treasury ETF was launched in 2010 to provide investors with a low-cost way to gain exposure to short-term U.S. Treasury securities.

Since inception, the fund has tracked multiple monetary policy cycles, including periods of historically low interest rates and more recent phases of monetary tightening by the Federal Reserve.

In recent years, rising interest rates and changing monetary policy expectations have renewed investor interest in ETFs focused on short-term U.S. government bonds.

Additional Information

Schwab Short-Term U.S. Treasury ETF (United States) is an exchange-traded fund (ETF), with assets under management totaling $12.86 billion.

Over the past 12 months, Schwab Short-Term U.S. Treasury ETF recorded a return of 2.72%, with its price trading between $24.03 and $24.46 during the same period.

The ETF is traded under the ticker SCHO.