Key Points

Schwab Short-Term U.S. Treasury ETF offers a reduced expense ratio along with a stronger trailing-12-month yield versus VanEck Short Muni ETF.
VanEck Short Muni ETF targets tax-exempt municipal bonds while the Schwab fund follows the short-term Treasury market.
Schwab Short-Term U.S. Treasury ETF maintains a much larger asset base and shows lower volatility based on its beta profile.

VanEck Short Muni ETF (NYSEMKT:SMB) delivers tax-exempt income for bond investors, whereas Schwab Short-Term U.S. Treasury ETF (NYSEMKT:SCHO) supplies a lower-cost, higher-yielding option via U.S. sovereign debt and strong liquidity.

Both funds act as defensive portfolio anchors aimed at capital preservation and liquidity. They focus on the short end of the yield curve, yet they vary in underlying credit exposure and the tax treatment of interest distributions.

Snapshot (cost and size)

Metric	SMB	SCHO
Issuer	VanEck	Schwab
Expense ratio	0.07%	0.03%
1-yr return (as of June 3, 2026)	4.0%	3.3%
Dividend yield	2.7%	3.9%
Beta	0.10	0.05
AUM	~$304.4 million	~$12.8 billion

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

The Schwab fund stands out as the more affordable option with a 0.03% expense ratio. It also delivers a higher yield, paying 3.9% over the trailing 12 months, which exceeds the VanEck fund payout by 1.21 percentage points.

Performance and risk comparison

Metric	SMB	SCHO
Max drawdown (5 yr)	(7.4%)	(5.7%)
Growth of $1,000 over 5 years (total return)	$1,063	$1,094

What's inside

The Schwab Short-Term U.S. Treasury ETF centers on the short-term U.S. Treasury market and holds 99 positions currently. Its portfolio leans heavily on cash and others at 98%, with small 1% allocations to technology and communication services. This fund began in 2010 and carries a trailing-12-month dividend of $0.94 per share.

In contrast, the VanEck Short Muni ETF follows the ICE Short AMT-Free Broad National Municipal Index and oversees 335 holdings. The portfolio consists of 100% cash and others, underscoring its emphasis on tax-exempt municipal bonds. The fund started in 2008 and distributed $0.47 per share over the trailing 12 months.

What this means for investors

Most bond fund comparisons hinge on yield, risk, and cost. This matchup introduces a fourth factor that alters the outcome: taxes. SMB holds short-term municipal bonds whose income is generally exempt from federal taxes. SCHO holds short-term U.S. Treasuries whose income is fully taxable at the federal level. That difference renders a direct yield comparison misleading.

SCHO yields more than SMB on paper, but an investor in the 32% or 37% federal tax bracket retains significantly less of that income after taxes, which can make SMB's lower stated yield the stronger after-tax choice. For investors in lower brackets, the calculation reverses and SCHO's higher yield prevails.

SCHO also charges less than half the fee of SMB and oversees roughly 40 times the assets, providing superior liquidity and scale among short-term bond funds. Both funds carry minimal interest rate risk given their short durations, and SCHO carries zero credit risk as a pure Treasury fund.

The right choice depends on your specific tax situation. Perform the after-tax yield calculation for your bracket before deciding. That step proves essential in this comparison.