Schwab 5-10 Year Corporate Bond ETF

Schwab 5-10 Year Corporate Bond ETF (SCHI) is an index fund that tracks the Bloomberg US 5-10 Year Corporate Bond Index. That index holds US-dollar bonds from companies that are rated investment grade, meaning lower risk of default, and that mature in five to ten years. Its 0.03% expense ratio ties Vanguard's VCIT for the lowest among similar funds. As of June 30, 2026, it held 2,345 bonds, and no single bond was above 0.3% of assets.

• Over the year to Oct 27, 2026, SCHI returned -1.8%, 8th of 8 among similar funds.
• Its 5-year annualized return was +0.8%.
• In the 2020 COVID crash it fell 16.8% and regained its old high 2.6 months after the low.
• Its worst full calendar year was 2022 (-14.1%); its best was 2020 (+9.8%).
• The deepest fall in its price history was 20.7% (Aug 3, 2021 to Oct 20, 2022), recovered by Jul 22, 2025.

As of Jun 30, 2026, the fund held 2,345 securities; the ten largest made up 2.43% of assets.

The bonds mature in 8.1 years on average (weighted by size), with an average coupon of 4.98%.

• Over the three months to Jun 30, 2026, investors added a net $1.32B (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.54%, +0.51%, +0.10%.

The fund follows the Bloomberg US 5-10 Year Corporate Bond Index. To be included, a bond must be investment grade, taxable, fixed-rate and priced in US dollars. It must mature in at least five years but less than ten, and it needs at least $300 million outstanding. The issuers are industrial, utility and financial companies in the US and abroad. The index leaves out inflation-linked bonds, floating-rate bonds, municipal bonds, structured notes and contingent capital securities, a type of bank debt that can be converted to stock or written off. The index is weighted by market value, so companies with more debt outstanding get bigger weights. It updates its list on the last business day of each month.

Schwab does not buy every bond in the index. Instead, it uses sampling: it holds a subset chosen to match the index's maturity, interest-rate sensitivity, sector mix and credit quality. At least 90% of net assets must be in index bonds. The remaining 10% can go to Treasuries, cash, other funds or futures used to manage interest-rate and credit risk. As of June 30, 2026, it held three small Treasury futures positions. The fund also lends out securities to earn extra income.

As of December 31, 2025, the index's duration was 6 years. Duration measures how much a bond's price reacts to interest-rate changes, and the fund aims to stay close to that figure. Portfolio turnover was 22%.

• SCHI charges 0.03% a year, versus an average of 0.13% for the similar funds below (1st of 8, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $3 in the first year and $39 over 10 years (assuming a 5% annual return).

It pays monthly income from about 2,300 investment-grade corporate bonds at a very low cost, but rising interest rates can push its price down hard.

SCHI could add steady monthly income to a portfolio. Its trailing 12-month yield was 5.15% as of October 27, 2026. The 0.03% expense ratio takes very little of that: in the SEC's standard example, $10,000 invested would cost about $39 over 10 years. It is not a shelter from losses, though. It launched in October 2019, so it has no record from 2008. In the 2020 COVID crash it fell 16.8% between March 4 and March 20, then recovered by June 8, 2020. When interest rates rose in 2022, it lost 14.0%, its worst calendar year. Its deepest drop was 20.7%, from August 2021 to October 2022, and it took 33 months to recover. Anyone forced to sell shares in late 2022 would have locked in those losses. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).