SCHQ Profile
The Schwab Long-Term U.S. Treasury ETF is structured to provide investors with exposure to U.S. Treasury securities with long-term maturities. The fund’s investment strategy focuses on securities included in the underlying index, which consists of publicly issued U.S. Treasury securities with remaining maturities of ten years or more. These securities must be rated investment grade and have an outstanding face value of at least $300 million.
The fund adheres to a policy of investing at least 90% of its net assets, including any borrowings for investment purposes, in securities that are part of the index. This approach ensures that the fund's portfolio closely mirrors the characteristics of the index, providing investors with exposure to long-term U.S. government debt. The inclusion of only investment-grade securities and those with substantial face value helps maintain a high level of credit quality and liquidity.
Schwab’s management of the ETF involves rigorous selection and rebalancing processes to align with the index’s criteria. By focusing on long-term Treasury securities, the fund seeks to offer investors a higher yield compared to short-term counterparts, albeit with increased sensitivity to interest rate fluctuations. The long duration of the securities in the portfolio exposes investors to greater interest rate risk, which is a key consideration for those looking to balance their investment portfolios.
The Schwab Long-Term U.S. Treasury ETF is designed for investors seeking to capitalize on the stability and security of U.S. government debt over a long investment horizon. It is particularly suitable for those looking for a conservative investment option with potential for higher returns compared to shorter-term securities. The fund’s emphasis on long-term U.S. Treasury securities aligns with strategies focused on maximizing income over extended periods while navigating interest rate changes.
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