Schwab Short-Term U.S. Treasury ETF (SCHO): Complete Beginner's Guide
Last updated: March 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% |
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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%
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.
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.
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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.