Schwab Short-Term U.S. Treasury ETF (SCHO): Complete Beginner's Guide
Schwab Short-Term U.S. Treasury ETF (SCHO) is a short-term treasury ETF from Schwab with an expense ratio of 0.03% and $12.0B in assets under management. Our Beginner Suitability Score: 9.5/10 (Great for Beginners). 5-year annualized return: 1.50%.
Last updated: April 2026
Schwab • Short-Term Treasury
Expense Ratio
0.03%
AUM
$12.0B
Dividend Yield
3.50%
Inception
2010
Beginner Score
9.5/10
What is Schwab Short-Term U.S. Treasury ETF?
SCHO invests in U.S. Treasury bonds with remaining maturities of one to three years, providing one of the safest fixed-income options available. It is backed entirely by U.S. government securities, making credit risk virtually zero. Beginners who want a very low-risk place to hold funds while earning some interest often consider SCHO as a step above a savings account.
SCHO is managed by Schwab and has been available since 2010. With $12.0B in assets under management, it's a well-established fund with strong institutional backing. The fund charges an expense ratio of 0.03%, which means for every $10,000 you invest, you pay approximately $3 per year in management fees.
SCHO at a Glance — Key Metrics
| Expense Ratio | 0.03% |
| Total Holdings | 100 |
| P/E Ratio | N/A |
| Beta | 0.05 |
| Dividend Yield | 3.50% |
| AUM | $12.0B |
| Inception Year | 2010 |
| Issuer | Schwab |
Top 10 Holdings in SCHO
SCHO holds 100 different securities. Here are the largest positions that make up the core of this fund:
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | U.S. Treasury 4.375% 2026 | GOVT | 5.50% |
| 2 | U.S. Treasury 4.0% 2027 | GOVT | 5.00% |
| 3 | U.S. Treasury 4.25% 2025 | GOVT | 4.80% |
| 4 | U.S. Treasury 3.875% 2026 | GOVT | 4.50% |
| 5 | U.S. Treasury 4.625% 2026 | GOVT | 4.20% |
| 6 | U.S. Treasury 3.5% 2027 | GOVT | 4.00% |
| 7 | U.S. Treasury 4.125% 2027 | GOVT | 3.80% |
| 8 | U.S. Treasury 3.75% 2025 | GOVT | 3.50% |
| 9 | U.S. Treasury 4.5% 2026 | GOVT | 3.30% |
| 10 | U.S. Treasury 3.625% 2027 | GOVT | 3.00% |
SCHO's top holding is U.S. Treasury 4.375% 2026 (GOVT) at 5.50%, followed by U.S. Treasury 4.0% 2027 (GOVT) at 5.00% and U.S. Treasury 4.25% 2025 (GOVT) at 4.80%. The top 10 holdings account for 41.60% of the fund's 100 total positions.
View data table
| Rank | Company | Ticker | Weight |
|---|---|---|---|
| 1 | U.S. Treasury 4.375% 2026 | GOVT | 5.50% |
| 2 | U.S. Treasury 4.0% 2027 | GOVT | 5.00% |
| 3 | U.S. Treasury 4.25% 2025 | GOVT | 4.80% |
| 4 | U.S. Treasury 3.875% 2026 | GOVT | 4.50% |
| 5 | U.S. Treasury 4.625% 2026 | GOVT | 4.20% |
| 6 | U.S. Treasury 3.5% 2027 | GOVT | 4.00% |
| 7 | U.S. Treasury 4.125% 2027 | GOVT | 3.80% |
| 8 | U.S. Treasury 3.75% 2025 | GOVT | 3.50% |
| 9 | U.S. Treasury 4.5% 2026 | GOVT | 3.30% |
| 10 | U.S. Treasury 3.625% 2027 | GOVT | 3.00% |
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SCHO Performance History
Here's how SCHO has performed over different time periods. Remember that past performance doesn't guarantee future results, but it gives you a sense of the fund's track record:
YTD
1.30%
1 Year
4.60%
3 Year
2.00%
5 Year
1.50%
10 Year
1.50%
SCHO has returned 1.50% annualized over 5 years and 1.50% over 10 years. YTD return is 1.30%.
View data table
| Period | Return |
|---|---|
| YTD | 1.30% |
| 1 Year | 4.60% |
| 3 Year | 2.00% |
| 5 Year | 1.50% |
| 10 Year | 1.50% |
Beginner Suitability Score: 9.5/10
Our proprietary Beginner Suitability Score evaluates ETFs based on five factors that matter most to new investors: fees, volatility, diversification, dividend history, and track record length.
SCHO scores 9.5/10 because it has very low fees, shows lower-than-average volatility, offers broad diversification across 100 holdings, and has been available since 2010, giving it a proven track record.
How to Buy SCHO — Step by Step
- Open a brokerage account — We recommend Fidelity, Charles Schwab, or Vanguard for ETF investing. All offer $0 commissions on ETF trades.
- Fund your account — Transfer money from your bank. You can start with as little as $1 if your broker offers fractional shares.
- Search for "SCHO" — Use the search bar in your brokerage platform to find Schwab Short-Term U.S. Treasury ETF.
- Place your order — Choose "Market Order" for simplicity or "Limit Order" if you want to set a specific price. Enter how many shares (or dollar amount) you want to buy.
- Set up automatic investing — Most brokers let you schedule recurring purchases (e.g., $100/month on the 1st). This is dollar cost averaging in action.
SCHO Sector Allocation
Here's how SCHO distributes its investments across different sectors of the economy:
SCHO's largest sector allocation is U.S. Treasury 1-2 Year at 48.0%, followed by U.S. Treasury 2-3 Year at 45.0% and U.S. Treasury 0-1 Year at 5.0%.
View data table
| Sector | Weight |
|---|---|
| U.S. Treasury 1-2 Year | 48.0% |
| U.S. Treasury 2-3 Year | 45.0% |
| U.S. Treasury 0-1 Year | 5.0% |
| Cash & Equivalents | 2.0% |
Dollar Cost Averaging Into SCHO
Here's what consistent monthly investing could look like over time, assuming an average annual return of 8% (approximate historical stock market average):
| Monthly | 10 Years | 20 Years | 30 Years |
|---|---|---|---|
| $100/mo | $18,417 | $59,295 | $150,030 |
| $250/mo | $46,041 | $148,237 | $375,074 |
| $500/mo | $92,083 | $296,474 | $750,148 |
*Projections assume 8% average annual return with monthly compounding. Actual returns will vary. Past performance doesn't guarantee future results.
Fee impact: With SCHO's expense ratio of 0.03%, a $10,000 investment would lose approximately $258 to fees over 20 years compared to a zero-fee investment. This is a reasonable fee level for the value provided.
SCHO's expense ratio of 0.03% costs $259 on a $10,000 investment over 20 years (assuming 8% annual return). Without fees, the investment would grow to $46,610 instead of $46,351.
View data table
| Year | Without Fees | With Fees | Fee Cost |
|---|---|---|---|
| 0 | $10,000 | $10,000 | $0 |
| 5 | $14,693 | $14,673 | $20 |
| 10 | $21,589 | $21,529 | $60 |
| 15 | $31,722 | $31,590 | $132 |
| 20 | $46,610 | $46,351 | $259 |
Pros and Cons of SCHO
Pros
- ✓100% U.S. Treasury holdings means virtually zero credit risk
- ✓Rock-bottom expense ratio of just 0.03% among the lowest available
- ✓Minimal interest rate sensitivity due to very short average duration
- ✓Excellent liquidity and extremely tight bid-ask spreads
Cons
- ✗Very low yields that may not keep up with inflation over time
- ✗Almost no capital appreciation potential in any interest rate environment
- ✗Limited diversification since it only holds U.S. Treasury securities
Frequently Asked Questions
Is SCHO a good ETF for beginners?▾
SCHO has a Beginner Suitability Score of 9.5/10 on our scale. This makes it a strong choice for new investors due to its low fees and broad diversification.
What is the expense ratio of SCHO?▾
SCHO has an expense ratio of 0.03%. This means for every $10,000 you invest, you pay approximately $3 per year in fees. This is considered very low and cost-efficient.
How much money do I need to invest in SCHO?▾
You can invest in SCHO with as little as $1 through brokers that offer fractional shares (like Fidelity, Schwab, or Robinhood). There is no minimum investment required beyond the share price itself, which changes daily. Dollar cost averaging — investing a fixed amount regularly — is a popular strategy.
Does SCHO pay dividends?▾
Yes, SCHO pays dividends with a current yield of approximately 3.50%. Dividends are typically paid quarterly and can be reinvested automatically through most brokers.
What are the top holdings in SCHO?▾
The top holdings in SCHO include U.S. Treasury 4.375% 2026 (5.50%), U.S. Treasury 4.0% 2027 (5.00%), U.S. Treasury 4.25% 2025 (4.80%), and more. The fund holds 100 total positions, providing broad diversification across many companies.
What sectors does SCHO invest in?▾
SCHO's largest sector allocations are U.S. Treasury 1-2 Year (48.00%), U.S. Treasury 2-3 Year (45.00%), U.S. Treasury 0-1 Year (5.00%). This sector distribution shows a focus on u.s. treasury 1-2 year stocks.
How much do SCHO's fees cost over time?▾
With an expense ratio of 0.03%, a $10,000 investment in SCHO would lose approximately $258 to fees over 20 years (assuming 8% annual returns). This is a reasonable fee level.