Schwab U.S. Aggregate Bond ETF (SCHZ): Complete Beginner's Guide
Schwab U.S. Aggregate Bond ETF (SCHZ) is a total bond market ETF from Schwab with an expense ratio of 0.03% and $8.0B in assets under management. Our Beginner Suitability Score: 10/10 (Great for Beginners). 5-year annualized return: 1.00%.
Last updated: April 2026
Schwab • Total Bond Market
Expense Ratio
0.03%
AUM
$8.0B
Dividend Yield
3.40%
Inception
2011
Beginner Score
10/10
What is Schwab U.S. Aggregate Bond ETF?
SCHZ tracks the Bloomberg U.S. Aggregate Bond Index, giving investors exposure to the entire U.S. investment-grade bond market including Treasuries, corporates, and mortgage-backed securities. It serves as a one-stop shop for bond exposure at a very low cost. Beginners often pair SCHZ with a broad stock ETF to build a complete, balanced portfolio with just two funds.
SCHZ is managed by Schwab and has been available since 2011. With $8.0B in assets under management, it's a growing fund that has attracted significant investor interest. 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.
SCHZ at a Glance — Key Metrics
| Expense Ratio | 0.03% |
| Total Holdings | 6,000 |
| P/E Ratio | N/A |
| Beta | 0.12 |
| Dividend Yield | 3.40% |
| AUM | $8.0B |
| Inception Year | 2011 |
| Issuer | Schwab |
Top 10 Holdings in SCHZ
SCHZ holds 6,000 different securities. Here are the largest positions that make up the core of this fund:
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | U.S. Treasury 4.0% 2033 | GOVT | 2.50% |
| 2 | U.S. Treasury 3.875% 2043 | GOVT | 2.20% |
| 3 | U.S. Treasury 4.25% 2031 | GOVT | 2.00% |
| 4 | Fannie Mae 4.0% MBS | FNMA | 1.80% |
| 5 | Ginnie Mae 4.5% MBS | GNMA | 1.60% |
| 6 | U.S. Treasury 3.5% 2053 | GOVT | 1.50% |
| 7 | Freddie Mac 3.5% MBS | FHLMC | 1.30% |
| 8 | Federal Home Loan Bank 4.0% | FHLB | 1.10% |
| 9 | JPMorgan Chase & Co. 4.25% 2032 | JPM | 0.90% |
| 10 | Bank of America 4.0% 2031 | BAC | 0.80% |
SCHZ's top holding is U.S. Treasury 4.0% 2033 (GOVT) at 2.50%, followed by U.S. Treasury 3.875% 2043 (GOVT) at 2.20% and U.S. Treasury 4.25% 2031 (GOVT) at 2.00%. The top 10 holdings account for 15.70% of the fund's 6,000 total positions.
View data table
| Rank | Company | Ticker | Weight |
|---|---|---|---|
| 1 | U.S. Treasury 4.0% 2033 | GOVT | 2.50% |
| 2 | U.S. Treasury 3.875% 2043 | GOVT | 2.20% |
| 3 | U.S. Treasury 4.25% 2031 | GOVT | 2.00% |
| 4 | Fannie Mae 4.0% MBS | FNMA | 1.80% |
| 5 | Ginnie Mae 4.5% MBS | GNMA | 1.60% |
| 6 | U.S. Treasury 3.5% 2053 | GOVT | 1.50% |
| 7 | Freddie Mac 3.5% MBS | FHLMC | 1.30% |
| 8 | Federal Home Loan Bank 4.0% | FHLB | 1.10% |
| 9 | JPMorgan Chase & Co. 4.25% 2032 | JPM | 0.90% |
| 10 | Bank of America 4.0% 2031 | BAC | 0.80% |
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SCHZ Performance History
Here's how SCHZ 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
0.80%
1 Year
4.00%
3 Year
1.20%
5 Year
1.00%
10 Year
2.00%
SCHZ has returned 1.00% annualized over 5 years and 2.00% over 10 years. YTD return is 0.80%.
View data table
| Period | Return |
|---|---|
| YTD | 0.80% |
| 1 Year | 4.00% |
| 3 Year | 1.20% |
| 5 Year | 1.00% |
| 10 Year | 2.00% |
Beginner Suitability Score: 10/10
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.
SCHZ scores 10/10 because it has very low fees, shows lower-than-average volatility, offers broad diversification across 6,000 holdings, and has been available since 2011, giving it a proven track record.
How to Buy SCHZ — 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 "SCHZ" — Use the search bar in your brokerage platform to find Schwab U.S. Aggregate Bond 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.
SCHZ Sector Allocation
Here's how SCHZ distributes its investments across different sectors of the economy:
SCHZ's largest sector allocation is U.S. Treasury at 41.0%, followed by MBS at 27.0% and Corporate at 22.0%.
View data table
| Sector | Weight |
|---|---|
| U.S. Treasury | 41.0% |
| MBS | 27.0% |
| Corporate | 22.0% |
| Government-Related | 5.0% |
| CMBS | 2.0% |
| Asset-Backed | 2.0% |
| Municipal | 0.5% |
| Cash & Equivalents | 0.5% |
Dollar Cost Averaging Into SCHZ
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 SCHZ'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.
SCHZ'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 SCHZ
Pros
- ✓detailed U.S. bond market exposure in a single low-cost ETF
- ✓Expense ratio of just 0.03% matches the cheapest aggregate bond funds
- ✓Over 6,000 holdings provide exceptional diversification across bond types
- ✓Ideal core bond holding for simple two-fund or three-fund portfolios
Cons
- ✗Intermediate duration means moderate sensitivity to rising interest rates
- ✗Returns have been negative in recent years due to the rate-hiking cycle
- ✗No exposure to high-yield or international bonds limits income potential
Frequently Asked Questions
Is SCHZ a good ETF for beginners?▾
SCHZ has a Beginner Suitability Score of 10/10 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 SCHZ?▾
SCHZ 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 SCHZ?▾
You can invest in SCHZ 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 SCHZ pay dividends?▾
Yes, SCHZ pays dividends with a current yield of approximately 3.40%. Dividends are typically paid quarterly and can be reinvested automatically through most brokers.
What are the top holdings in SCHZ?▾
The top holdings in SCHZ include U.S. Treasury 4.0% 2033 (2.50%), U.S. Treasury 3.875% 2043 (2.20%), U.S. Treasury 4.25% 2031 (2.00%), and more. The fund holds 6,000 total positions, providing broad diversification across many companies.
What sectors does SCHZ invest in?▾
SCHZ's largest sector allocations are U.S. Treasury (41.00%), MBS (27.00%), Corporate (22.00%). This sector distribution shows a focus on u.s. treasury stocks.
How much do SCHZ's fees cost over time?▾
With an expense ratio of 0.03%, a $10,000 investment in SCHZ would lose approximately $258 to fees over 20 years (assuming 8% annual returns). This is a reasonable fee level.