JPST and SCHO Both Park Cash but One Compounds Nearly Double Over Five Years

Investors hunting for a place to park cash between trades, between paychecks, or between rate cycles keep landing on the same two tickers: Schwab Short-Term U.S. Treasury ETF (NYSEARCA:SCHO | SCHO Price Prediction) and JPMorgan Ultra-Short Income ETF (NYSEARCA:JPST). They look like cousins on the screener. They behave like strangers in the data. JPST is up 1.18% year to date while SCHO has returned just 0.48%, and that gap is the entry point into a comparison that hinges on what kind of risk you are willing to hold inside your cash sleeve.

What Each Fund Is Actually Betting On

SCHO is a pure duration play with zero credit risk. It tracks the Bloomberg US Treasury 1-3 Year Index, holding nothing but U.S. Treasury notes with one to three years to maturity. The implicit bet: when the front end of the curve rallies, typically because the Fed is cutting or the market is fleeing to quality, SCHO wins. When short rates rise, the duration sting shows up in the NAV.

JPST is an actively managed credit harvest. The portfolio is dominated by investment-grade corporate debt, asset-backed securities, CLOs, and bank paper from issuers like Athene Global Funding, Capital One, Commerzbank, Deutsche Bank, and Bank of Montreal. Weighted average maturity stays under a year. The bet is to clip a credit spread on top of money-market yields while keeping duration almost nil. It wins when spreads are tight and short rates stay elevated. It bleeds when credit markets seize, as briefly happened in March 2020.

Where the Difference Shows Up

The 2022 rate shock punished SCHO because two-year Treasury yields ripped higher and dragged its NAV down. JPST barely flinched. Run it out further and the pattern holds: JPST has compounded 19.28% over five years versus SCHO’s 9.46%. Over the past year, JPST returned 4.47% against SCHO’s 3.61%. The credit pickup has paid, and duration has not.

The Practical Comparison

SCHO’s expense edge is real but small. The state-tax exemption on Treasury interest is the bigger structural advantage for investors in California, New York, or New Jersey.

The Verdict

For the job most investors hire one of these funds to do, holding cash that earns more than a sweep account without dramatic NAV swings, JPST pulls ahead. Higher yield, lower duration, steadier price, and a five-year return roughly double SCHO’s. SCHO wins in two specific situations: when an investor lives in a high-tax state and needs the state-exempt Treasury income, or when the trade is explicitly a flight-to-quality hedge that should rally as the Fed cuts and credit spreads widen. Outside those cases, JPST is the better cash vehicle.