Schwab Long-Term US Treasury ETF

SCHQ

Valor de mercado US$ 973 mi

The Schwab Long-Term US Treasury ETF faces significant duration risk amid heightened long-term yield volatility driven by structural inflation and geopolitical tensions. Rising inflation expectations, persistent energy shocks, and potential maritime trade disruptions in the Gulf are materially increasing long-term yields, negatively impacting SCHQ. Consumer inflation expectations remain elevated, challenging the Fed's credibility and risking anchoring higher long-term rates, which may be systematically unappreciated by markets.

Treasury Secretary Bessent insists on challenging the bond vigilantes, and neither side is backing down. The underlying trends are pointing toward volatility ahead and potentially much more.

Both Schwab Long-Term U.S. Treasury ETF and Vanguard Long-Term Treasury ETF share a competitive 0.03% expense ratio. Vanguard Long-Term Treasury ETF is the larger fund by assets under management, offering higher daily trading volume for institutional and retail investors.

Both funds feature ultra-low 0.03% expense ratios. Vanguard Long-Term Corporate Bond ETF provides a higher dividend yield compared to the government-focused Schwab Long-Term U.S. Treasury ETF.

Schwab Long-Term U.S. Treasury ETF (SCHQ) offers a lower expense ratio than iShares 10+ Year Investment Grade Corporate Bond ETF. iShares 10+ Year Investment Grade Corporate Bond ETF (IGLB) provides a higher trailing 12-month dividend yield and better 5-year total returns.

The Schwab Long-Term US Treasury ETF (SCHQ) offers high liquidity and low expense ratio, tracking long-duration US Treasuries with a 13.8-year effective duration. But caution is needed with duration, citing persistent inflation risks, hawkish Fed posture, and geopolitical tensions that pressure long-term yields upward. Geopolitical instability and structural inflation pose significant threats to the forward rates, reflected in sharp changes on the long-side of the yield curve in particular.

On Wednesday, July 29, the FOMC rate decision will be followed by Microsoft and Meta earnings after the close. Thursday begins with the advance estimate of Q2 GDP and the June PCE inflation report before Apple and Amazon report after the bell. CME FedWatch currently implies a 62–65% probability that the Fed holds rates in July, with the remaining probability assigned to a hike.

The Schwab Long-Term U.S. Treasury ETF (SCHQ) offers a slightly lower expense ratio than the iShares 10+ Year Investment Grade Corporate Bond ETF (IGLB). SCHQ provides a higher trailing-12-month dividend yield by focusing on long-dated corporate debt.

The Schwab Long-Term U.S. Treasury ETF (SCHQ) offers a slightly lower expense ratio and a lower volatility profile than the State Street SPDR Portfolio Long Term Corporate Bond ETF (SPLB). SPLB delivers a higher dividend yield than SCHQ.

Schwab Long-Term U.S. Treasury ETF offers a significantly lower expense ratio and a higher dividend yield than iShares iBoxx $ Investment Grade Corporate Bond ETF. The iShares iBoxx $ Investment Grade Corporate Bond ETF has provided stronger total returns over the last year while experiencing much less price volatility.