Vanguard vs. Schwab Short-Term Treasury ETFs: Which One Delivers the Better Safe-Haven Return?
Key Points
Vanguard Short-Term Treasury ETF and Schwab Short-Term U.S. Treasury ETF both offer ultra-low expense ratios of 0.03%.
The two funds track nearly identical benchmarks focusing on U.S. Treasury securities with maturities between one and three years.
Vanguard Short-Term Treasury ETF manages a significantly larger pool of assets, though both provide high liquidity for investors.
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The primary difference between the Vanguard Short-Term Treasury ETF (NASDAQ:VGSH) and the Schwab Short-Term U.S. Treasury ETF (NYSEMKT:SCHO) is their issuer, as both funds provide nearly identical exposure to short-duration government debt.
These two exchange-traded funds (ETFs) serve as defensive pillars for income-focused investors who prioritize capital preservation. By targeting U.S. Treasury notes with maturities of one to three years, they provide a reliable haven from stock market volatility while generating steady interest income with virtually zero credit risk from the federal government.
Snapshot (cost & size)
| Metric | VGSH | SCHO |
|---|---|---|
| Issuer | Vanguard | Schwab |
| Share price | $57.52 (as of 2026-10-02) | $23.85 (as of 2026-10-02) |
| Expense ratio | 0.03% | 0.03% |
| 1-yr return (as of 2026-10-02) | 1.6% | 2.5% |
| Dividend yield | 4.5% | 3.9% |
| Beta | 0.22 | 0.22 |
| AUM | $39.3B | $15.3B |
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Both funds are exceptionally efficient, sharing an identical 0.03% expense ratio that ranks among the lowest in the industry. Because they track nearly the same segment of the yield curve, the choice between them is largely a matter of issuer preference.
Performance & risk comparison
| Metric | VGSH | SCHO |
|---|---|---|
| Max drawdown (5 yr) | (5.7%) | (5.4%) |
| Growth of $1,000 over 5 years (total return) | $1,095 | $1,096 |
What's inside
Schwab Short-Term U.S. Treasury ETF is a fixed-income fund with no equity sector breakdown. It holds 97 securities and follows a highly diversified approach, with no single position exceeding 0.08% of the total portfolio. This fund was launched in 2010. Schwab Short-Term U.S. Treasury ETF has paid $0.91 per share over the trailing 12 months, which, at its recent ~$23.82 share price, works out to a 3.8% yield.
Vanguard Short-Term Treasury ETF is also a fixed-income fund with no equity sector breakdown. This fund was launched in 2009. Vanguard Short-Term Treasury ETF has paid $2.19 per share over the trailing 12 months, which, at its recent ~$57.5 share price, works out to a 3.8% yield.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy
VGSH and SCHO are both excellent, low-risk short-term Treasury ETFs, and neither is clearly superior to the other.
VGSH may be the better buy if:
- You want a larger, more actively traded fund. With $39.3 billion in net assets, Vanguard Short-Term Treasury ETF manages more than twice Schwab Short-Term U.S. Treasury ETF’s $15.3 billion in assets.
- You already work with Vanguard and are familiar with its advanced trading tools.
- Your broker offers better pricing or easier recurring purchases for VGSH.
SCHO may be a better buy if:
- You use Schwab and would find it easier to purchase SCHO through your established brokerage.
- You prefer the lower share price, which can make buying a specific dollar amount easier on your budget.
- You essentially want the same Treasury exposure, but prefer Schwab for its full banking setup.
Given their nearly identical missions, duration, costs, and long-term performance, VGSH and SCHO are much more alike than different. For most investors, the choice will not materially change risks or expected return.
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Dana George has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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