The Schwab U.S. TIPS ETF (SCHP) and the JPMorgan Ultra-Short Income ETF (JPST) are both among the Top 100 ETFs. SCHP is a Schwab ETFs Inflation-Protected Bond fund and JPST is a JPMorgan Ultrashort Bond fund. So, what’s the difference between SCHP and JPST? And which fund is better?
The expense ratio of SCHP is 0.13 percentage points lower than JPST’s (0.05% vs. 0.18%). SCHP is mostly comprised of AAA bonds and JPST has a high exposure to A bond. Overall, SCHP has provided higher returns than JPST over the past 3 years.
In this article, we’ll compare SCHP vs. JPST. We’ll look at industry exposure and fund composition, as well as at their performance and portfolio growth. Moreover, I’ll also discuss SCHP’s and JPST’s annual returns, risk metrics, and holdings and examine how these affect their overall returns.
Summary
| SCHP | JPST | |
| Name | Schwab U.S. TIPS ETF | JPMorgan Ultra-Short Income ETF |
| Category | Inflation-Protected Bond | Ultrashort Bond |
| Issuer | Schwab ETFs | JPMorgan |
| AUM | 18.41B | 17.32B |
| Avg. Return | 3.92% | 2.57% |
| Div. Yield | 1.97% | 0.94% |
| Expense Ratio | 0.05% | 0.18% |
The Schwab U.S. TIPS ETF (SCHP) is a Inflation-Protected Bond fund that is issued by Schwab ETFs. It currently has 18.41B total assets under management and has yielded an average annual return of 3.92% over the past 10 years. The fund has a dividend yield of 1.97% with an expense ratio of 0.05%.
The JPMorgan Ultra-Short Income ETF (JPST) is a Ultrashort Bond fund that is issued by JPMorgan. It currently has 17.32B total assets under management and has yielded an average annual return of 2.57% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.18%.
SCHP’s dividend yield is 1.03% higher than that of JPST (1.97% vs. 0.94%). Also, SCHP yielded on average 1.34% more per year over the past decade (3.92% vs. 2.57%). The expense ratio of SCHP is 0.13 percentage points lower than JPST’s (0.05% vs. 0.18%).
Fund Composition
Holdings
| SCHP Bond Sectors | Weight |
| AAA | 100.0% |
| Others | 0.0% |
| Below B | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| BBB | 0.0% |
| A | 0.0% |
| AA | 0.0% |
| US Government | 0.0% |
SCHP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
| JPST Bond Sectors | Weight |
| A | 39.21% |
| BBB | 36.75% |
| AAA | 14.9% |
| AA | 9.14% |
| Others | 0.0% |
| Below B | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| US Government | 0.0% |
JPST’s Top Bond Sectors are ratings of A, BBB, AAA, AA, and Others at 39.21%, 36.75%, 14.9%, 9.14%, and 0.0%. The fund is less weighted towards Below B (0.0%), B (0.0%), and BB (0.0%) rated bonds.
Risk Analysis
| SCHP | JPST | |
| Mean Return | 0.28 | 0 |
| R-squared | 66.16 | 0 |
| Std. Deviation | 4.32 | 0 |
| Alpha | -0.5 | 0 |
| Beta | 1.17 | 0 |
| Sharpe Ratio | 0.64 | 0 |
| Treynor Ratio | 2.31 | 0 |
The Schwab U.S. TIPS ETF (SCHP) has a Alpha of -0.5 with a Standard Deviation of 4.32 and a Mean Return of 0.28. Its Beta is 1.17 while SCHP’s Treynor Ratio is 2.31. Furthermore, the fund has a Sharpe Ratio of 0.64 and a R-squared of 66.16.
The JPMorgan Ultra-Short Income ETF (JPST) has a Sharpe Ratio of 0 with a Standard Deviation of 0 and a Beta of 0. Its R-squared is 0 while JPST’s Treynor Ratio is 0. Furthermore, the fund has a Alpha of 0 and a Mean Return of 0.
SCHP’s Mean Return is 0.28 points higher than that of JPST and its R-squared is 66.16 points higher. With a Standard Deviation of 4.32, SCHP is slightly more volatile than JPST. The Alpha and Beta of SCHP are 0.50 points lower and 1.17 points higher than JPST’s Alpha and Beta.
Performance
Annual Returns
| Year | SCHP | JPST |
| 2020 | 10.94% | 2.17% |
| 2019 | 8.36% | 3.36% |
| 2018 | -1.31% | 2.19% |
| 2017 | 2.95% | 0.0% |
| 2016 | 4.6% | 0.0% |
| 2015 | -1.5% | 0.0% |
| 2014 | 3.56% | 0.0% |
| 2013 | -8.66% | 0.0% |
| 2012 | 6.83% | 0.0% |
| 2011 | 13.38% | 0.0% |
| 2010 | 0.0% | 0.0% |
SCHP had its best year in 2011 with an annual return of 13.38%. SCHP’s worst year over the past decade yielded -8.66% and occurred in 2013. In most years the Schwab U.S. TIPS ETF provided moderate returns such as in 2017, 2014, and 2016 where annual returns amounted to 2.95%, 3.56%, and 4.6% respectively.
The year 2019 was the strongest year for JPST, returning 3.36% on an annual basis. The poorest year for JPST in the last ten years was 2017, with a yield of 0.0%. Most years the JPMorgan Ultra-Short Income ETF has given investors modest returns, such as in 2013, 2012, and 2011, when gains were 0.0%, 0.0%, and 0.0% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| SCHP | $10,000 | $11,863 | 3.92% |
| JPST | $10,000 | $10,791 | 2.57% |
A $10,000 investment in SCHP would have resulted in a final balance of $11,863. This is a profit of $1,863 over 3 years and amounts to a compound annual growth rate (CAGR) of 3.92%.
With a $10,000 investment in JPST, the end total would have been $10,791. This equates to a $791 profit over 3 years and a compound annual growth rate (CAGR) of 2.57%.
SCHP’s CAGR is 1.34 percentage points higher than that of JPST and as a result, would have yielded $1,072 more on a $10,000 investment. Thus, SCHP outperformed JPST by 1.34% annually.
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