Schwab Treasury ETF vs iShares Corporate Bond Fund
LQD offers more stability with a 24.9% max drawdown, while SCHQ has a lower 0.03% expense ratio but shows greater volatility over five years.
Overview
The choice between iShares iBoxx $Investment Grade Corporate Bond ETF (NYSEMKT:LQD) and Schwab Long-Term U.S. Treasury ETF (NYSEMKT:SCHQ) often comes down to a preference for corporate credit risk versus government duration risk -- the risk that a bond fund's share price will fall when interest rates rise.
Both funds serve as core components for fixed-income investors, but they target different segments of the bond market. While LQD invests in investment-grade corporate debt, SCHQ focuses on the long end of the U.S. Treasury curve, offering different sensitivities to interest rate shifts and economic cycles.
Details
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Source
Originally published at www.fool.com.