Schwab Long-Term U.S. Treasury ETF (09S3)
XMUN 
Summary
09S3 Chart
SCHQ: Still Some Concerns After Possible Good Hormuz News
The Schwab Long-Term US Treasury ETF (SCHQ) faces heightened sensitivity to YTM changes due to its 13.7-year duration. Recent declines in SCHQ reflect reinflation risks and show the costs of suboptimal duration allocations in times when inflation is a key economic question. A potential Hormuz resolution could benefit duration bets, but structural risk premia and inflation momentum may persist.
SCHQ: Duration Bets Paying Off On Supreme Court And AI
Schwab Long-Term U.S. Treasury ETF (SCHQ) faces risks from the debasement trade and USD reserve status uncertainty, limiting its fixed income appeal. Recent declines in long-term rates are driven by weaker economic outlooks and the Supreme Court's tariff decision, but the latter catalyst may not be so durable and could reverse. SCHQ offers significant duration exposure (13.8 years) and a lower expense ratio (0.03%) compared to TLT, so it's efficiently run at least.
SCHQ Offers Pure Treasury Focus While SPLB Yields More
SCHQ comes with a slightly lower expense ratio and focuses on long-term U.S. Treasury bonds, while SPLB targets long-term investment-grade corporate bonds. SPLB has delivered a stronger 1-year return and higher dividend yield, and has also shown a smaller maximum drawdown than SCHQ.
Schwab Long-Term U.S. Treasury ETF (09S3) FAQ
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Schwab Long-Term U.S. Treasury ETF Profile
| XMUN Exchange | US Country |
Overview
The fund is dedicated to investing in a specific range of U.S. Treasury securities, aiming to follow the performance of its chosen index closely. This index is comprised solely of U.S. Treasury securities that have a minimum remaining maturity of ten years, hold an investment-grade rating, and possess a substantial outstanding face value of $300 million or more. Adhering to a stringent investment strategy, the fund commits to allocate at least 90% of its net assets, which includes any borrowed capital for investment purposes, into the securities that are part of the index, ensuring a focused approach towards achieving its investment goal.
Products and Services
- Investment in U.S. Treasury Securities
This service primarily involves the acquisition and management of U.S. Treasury securities that meet specific criteria: a minimum of ten years remaining until maturity, holding an investment-grade rating, and having at least $300 million in outstanding face value. Such a focused investment approach seeks to capitalize on the stability and reliability of these government-issued bonds.
- Adherence to the Index
The core of the fund's investment strategy is to closely follow the performance of its selected index. By investing at least 90% of its net assets into securities present within the index, the fund aims to ensure that its portfolio mirrors the index's composition and performance, subject to the fund's stated investment parameters. This disciplined approach facilitates a targeted investment strategy, striving for alignment with the index's returns.
