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ETF Specialist

A Silver-Rated ETF for Core Bond Exposure

Broad diversification and low costs make this fund a good option for core fixed-income exposure.


Schwab U.S. Aggregate Bond ETF (SCHZ) is a great selection as a core investment-grade bond fund, in large part because of its rock-bottom fee. Its conservative portfolio further sets it up for long-term success. It earns a Morningstar Analyst Rating of Silver.

The strategy tracks the Bloomberg Barclays U.S. Aggregate Bond Index, which includes investment-grade U.S.-dollar-denominated bonds with at least one year until maturity. The index is weighted by market value, tilting the portfolio toward the largest, most liquid issues, which are easy to obtain and cheap to trade. This approach also harnesses the market's collective wisdom about the relative value of each security, which is a prudent approach for the long term. That said, bond-issuing activity influences the composition of this portfolio.

Neal Kosciulek does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.