3 Gold-Rated Schwab ETFs to Buy

We've got it pretty easy, folks. Why is that? Building a comprehensive, diversified portfolio of investments has never been simpler, and it's never been cheaper.

In fact, one of our most difficult choices anymore is deciding which of several low-cost fund providers we want to provide the foundation of our investing accounts. You don't have to go with just one, of course—you can mix and match funds from numerous offerers—but some people prefer to buy all of their core portfolio holdings from one fund provider. That could be for any number of reasons; they might prefer one provider's managers, for instance, or they prefer the way their index funds are built.

Today, I'm going to show you how to keep it all within the Schwab family. Schwab ETFs only number around 30 or so, but they're among the lowest-cost products on the market, and they largely tend to earn strong ratings from analysts who cover funds.

In this article, I look at a handful of the best Schwab ETFs to buy for building a basic portfolio. Each of these funds represents a core holding type, and each immediately provides you with exposure to hundreds if not thousands of investments within that space—and for pennies, no less.

Disclaimer: This article does not constitute individualized investment advice. Individual securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

The Best Schwab ETFs to Buy Now

This isn't an exhaustive list of every fund you'd want for, say, swing trading or day trading. It's just a smart place to start if you want to build a buy-and-hold portfolio using Schwab ETFs.

In addition to important data information such as dividend yield and expense ratio, I've listed Morningstar's Medalist and Star ratings for each ETF. Morningstar's Medalist rating is a forward-looking analytical view of the fund, while Morningstar's Star rating is a backward-looking view that measures a fund's risk-adjusted return vs. its peers. Every fund on this list has a minimum Medalist rating of Silver and Star rating of 3 (out of 5).

Let's look at three of my top picks from my larger article about the best Schwab ETFs to buy.

Schwab U.S. Large-Cap ETF

• Style: U.S. large-cap stock
• Assets under management: $72.5 billion
• Dividend yield: 1.0%
• Expense ratio: 0.03%, or 30¢ annually on a $1,000 investment
• Morningstar Medalist rating: Gold
• Morningstar Star rating: 4 stars

American investors are commonly told to build their portfolio core around large-capitalization U.S. stocks.* That large-cap stock exposure will often come from an index fund tracking the S&P 500—a collection of 500 major U.S. businesses, and a proxy for the American stock market. That's why three of the biggest fund providers—Vanguard, State Street, and BlackRock's iShares—offer up ETFs that track this ubiquitous index.

Schwab doesn't. Instead, it provides something similar with the Schwab U.S. Large-Cap ETF (SCHX).

SCHX doesn't track the S&P 500, but instead the Dow Jones U.S. Large-Cap Total Stock Market Index. Why not just offer an S&P 500 fund? Well, at the time Schwab's ETF was launched, using this index allowed the firm to keep costs extremely low—at inception in 2009, SCHX was at least as cheap, if not cheaper, than any of the S&P 500 ETFs.

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Schwab U.S. Large-Cap ETF holds about 750 U.S. large-cap stocks, so you're enjoying even broader exposure than what you'd receive from an S&P 500 ETF. Of course, 97% of the S&P 500's stocks are in SCHX. Additionally, like S&P 500 trackers (and many other index funds), Schwab's fund is "cap-weighted," meaning the bigger the stock, the more of it SCHX holds—blue-chip names like Nvidia (NVDA), Apple (AAPL), and Google parent Alphabet (GOOG/GOOGL) are currently among the ETF's top dogs. In fact, more than 90% of SCHX's "weight" (the percentage of the fund's assets dedicated to a specific holding) is placed in S&P 500 holdings.

Put differently? While SCHX doesn't track the S&P 500, it's really similar. 

Since Schwab U.S. Large-Cap ETF launched, other fund providers have lowered the expenses on their S&P 500 ETFs, so while SCHX is still cheaper than many similar funds, it doesn't have a cost edge over as many funds as it used to. Performance is generally close to the S&P 500, though long-term it has marginally underperformed. Regardless, it remains one of Schwab's best ETFs: a straightforward and dirt-cheap way to address one of the most crucial aspects of your portfolio.

* There are different ways to define "cap" levels. We're adhering to Morningstar's definition, which says the largest 70% of companies by market capitalization within a fund's "style" are large caps, the next 20% by market cap are mid-caps, and the smallest 10% by market cap are small caps.

Related: 10 Best Schwab Mutual Funds You Can Buy [Low Fees, $1 Minimums]

Schwab International Equity ETF

• Style: International large-cap stock
• Assets under management: $66.1 billion
• Dividend yield: 3.1%
• Expense ratio: 0.03%, or 30¢ annually on a $1,000 investment
• Morningstar Medalist rating: Gold
• Morningstar Star rating: 4 stars

Up until now, every Schwab ETF I've talked about has focused on U.S. companies.

Why not? Most everyone reading this is from the States. And besides: America's stock markets have long been among the best-performing on the planet. Thus, most advisers will tell you to put the lion's share of your assets into owning U.S.-based stocks and bonds.

But those same advisors will also typically tell you to get a little geographic diversification, too. The U.S. might not carry the torch every single year, and having international exposure might help smooth out rough patches when American stocks struggle. (And in some cases, like 2025, they outperform even when U.S. equities shine.)

Related: 11 Best Vanguard Funds for the Everyday Investor

The Schwab International Equity ETF (SCHF) is an extremely low-cost way to do so, at just 0.03% annually. It holds a broad selection of 1,500 equities of companies domiciled outside the U.S., with most of those coming from developed-market countries such as Japan, the U.K., Canada, and France.

Like many ETFs heavy in developed-nation exposure, SCHF is loaded with blue chips; large companies enjoy an 85% weight, with virtually all the rest of assets dedicated to mid-caps. Developed-market stocks tend to offer higher dividends on average than their American counterparts; positions such as HSBC Holdings (HSBC), AstraZeneca (AZN), and Nestlé (NSRGY) contribute to a fund yield that's about thrice what the S&P 500 pays.

"Low fees also contribute to strong performance relative to its Morningstar Category," Morningstar Analyst Zachary Evens says about this Gold-rated ETF. “The fund returned 11.4% annualized for the five years through September 2025, outpacing its average peer by more than 1 percentage point. Its volatility was slightly higher, but risk-adjusted returns also were favorable relative to the category average. Going forward, investors should expect the strategy to do well when developed markets do well.”

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Schwab Short-Term U.S. Treasury ETF

• Style: U.S. short-term government bond
• Assets under management: $12.7 billion
• SEC yield: 4.2%
• Expense ratio: 0.03%, or 30¢ annually on a $1,000 investment
• Morningstar Medalist rating: Gold
• Morningstar Star rating: 3 stars

As a general rule, the longer a bond's maturity, the higher the risk. 

Think about it: If you buy a two-year bond from a financially strong company, you'll be pretty confident it can repay that bond in full. However, if you buy a 20-year bond from that same company … sure, you might still have plenty of faith in the company, but 20 years is a lot longer for something to go wrong. As a result, issuers typically have to offer higher yields to convince investors to take that added risk.

Related: The 11 Best Fidelity Funds to Buy Now

Short-term bond funds, then, typically offer investors a relatively safe place to invest while earning a modest amount of income.

The Schwab Short-Term U.S. Treasury ETF (SCHO) further ratchets down risk by holding only short-term debt from the U.S. Treasury—an institution that enjoys some of the highest debt ratings on the planet given their long history of paying back its debtors. This Schwab ETF currently invests in almost 100 different Treasury issues with an average maturity of two years. Its duration of just 1.9 years means that if interest rates rose a full percentage point, SCHO's price would decline by a mere 1.9%.

Also worth noting: The "yield curve" was inverted (meaning short-term rates were higher than long-term rates) for a two-year stretch that started in 2022. While the inversion ended in 2024, SCHO still offers a yield of more than 4%, which is mighty competitive given its relatively modest risk profile.

Learn More About These and Other Funds With Morningstar Investor

If you're buying a fund you plan on holding for years (if not forever), you want to know you're making the right selection. And Morningstar Investor can help you do that.

Morningstar Investor provides a wealth of information and comparable data points about mutual funds and ETFs—fees, risk, portfolio composition, performance, distributions, and more. Morningstar experts also provide detailed explanations and analysis of many of the funds the site covers.

With Morningstar Investor, you'll enjoy a wealth of features, including Morningstar Portfolio X-Ray®, stock and fund watchlists, news and commentary, screeners, and more. And you can try it before you buy it. Right now, Morningstar Investor is offering a free seven-day trial and a discount on your first year's subscription when you use our exclusive link.

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