BSV vs. SCHO: Short-Term Bond ETFs with Long-Lasting Dividend Potential
Both the Schwab Short-Term U.S. Treasury ETF (NYSEMKT:SCHO)and Vanguard Short-Term Bond ETF (NYSEMKT:BSV) aim to provide low-cost, short-duration fixed-income exposure, appealing to investors seeking stability and modest income. This comparison looks at their fees, risk, makeup, and recent performance, helping highlight where their approaches to the short-term bond market differ.
Snapshot (cost & size)
| Metric | SCHO | BSV |
|---|---|---|
| Issuer | Schwab | Vanguard |
| Expense ratio | 0.03% | 0.03% |
| 1-yr return (as of Feb. 7, 2026) | 0.74% | 1.68% |
| Dividend yield | 4.02% | 3.86% |
| Beta | 0.05 | 0.09 |
| AUM | $11.68 billion | $43.41 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.
Both ETFs are among the most affordable in the bond space, charging just 0.03% annually, but SCHO edges out BSV by yield, while BSV has the higher one-year return.
Performance & risk comparison
| Metric | SCHO | BSV |
|---|---|---|
| Max drawdown (5 y) | -5.73% | -8.55% |
| Growth of $1,000 over 5 years | $947 | $951 |
What’s inside
BSV holds a mix of U.S. Treasuries and corporate and investment-grade international bonds. It has 3,117 holdings, of which 73% are AAA-rated bonds, the highest rating offered. However, approximately 12% is invested in A and BBB-rated bonds, which are riskier.
Launched 15 years ago, SCHO is designed to track the short-term U.S. Treasury bond market and holds 97 securities. All of the bonds held are U.S. government bonds, and mature within 1-3 years. Most of them are AA-rated, offering an extremely low chance of debt default.
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What this means for investors
Both bonds perform similarly, but what’s interesting about BSV is that, even though its dividend yield is lower, it pays out more than SCHO because its price is more than three times higher.
It’s also worth noting that while both ETFs are short-term, SCHO is more focused on bonds that mature from 1-3 years, a shorter span than the 1-5 span BSV allows. This could mean that, on average, the bonds in SCHO’s holdings expire sooner, which would be a benefit for those looking for less volatility, as short-term bonds are often more stable than longer-term bonds because they have less exposure to interest rate fluctuations.
Regardless, if investors are looking for more diverse bond exposure, BSV has the edge, with over 200 times more holdings and a portfolio of bonds that spans across four different rate classes. But for greater stability and lower risk, SCHO is the more ideal option.
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