Schwab Expands Active Fixed Income Lineup With New Core Bond ETF

Schwab Asset Management is making another big move in the actively managed bond ETF space with the launch of the Schwab Core Bond ETF SCCR. With an expense ratio of just 0.16%, the ETF offers investors a low-cost way to gain exposure to a broad range of U.S.-dollar-denominated debt securities. The ETF tracks the Bloomberg US Aggregate Bond Index.

The fund includes corporate bonds, taxable municipal bonds, mortgage pass-through securities, commercial mortgage-backed securities, asset-backed securities, U.S. Treasuries and other government-related bonds.

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Why Active Management?

Investors are increasingly turning to active bond management as they look for ways to generate income while protecting against interest rate volatility. Unlike passive strategies, actively managed funds offer the flexibility to adjust holdings based on changing market conditions, something that can be particularly useful in uncertain economic times.

David Lafferty, director of Product Management & Innovation at Schwab Asset Management, highlighted this benefit. “The Schwab Core Bond ETF provides investors with access to our portfolio management team's expertise, along with the inherent features of an ETF. In today's rate environment, investors have the potential to capture a healthy level of income and navigate total market volatility by diversifying their core bond exposure with high-quality bonds."

About 7.94% of the ETF’s total assets are allocated to Treasury Note. This is the firm's second active fixed income ETF, following the success of the Schwab Ultra-Short Income ETF SCUS, which debuted in August of 2024.

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