An earlier post in Bond Squad raised the question of whether or not SWBDX had becomoe "toxic." Looking at the Morningstar data for the fund's holdings may explain some of its recent performance.  In response to the original post I said: "As a short term bond fund its performance seems out of sync with other such funds.  In particular a comparison with VFSTX perhaps illustrates the problem.  Part of the problem may be traceable to the fact that--per Morningstar-- VFSTX only has 12.9% in mortgage whereas SWBDX has 30.14% in mortgage.  And they are not GNMA quality--SWBDX has 29.37% in Mortgage CMO,  In addtion, note that SWBDX portfolio is weak with 5.2% of its holdings NOT rated.  In addition 14% is BBB or lower in quality."

Keep in mind that an ultra short "sister" fund (SWYPX) recently had a major withdrawal run against it and it is now a subject of a class action lawsuit.

A lack of confidence in Schwab Bonds???