Vanguard vs. Schwab Short-Term Treasury ETFs: Which One Delivers the Better Safe-Haven Return?

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.

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.