Which Is the Better Short-Term Bond ETF for Income and Safety: iShares' ISTB or Schwab's SCHO?
These portfolio anchors differ in bond mix, volatility, and income approach. See how each ETF aligns with your fixed income strategy.
Overview
Investors choosing between iShares Core 1-5 Year USD Bond ETF (NASDAQ:ISTB) and Schwab Short-Term U.S. Treasury ETF (NYSEMKT:SCHO) must weigh the higher yield and corporate debt exposure of ISTB against the lower cost and purity of SCHO.
Both funds serve as conservative anchors for a portfolio, focusing on short-term fixed income to mitigate interest rate risk. While ISTB casts a wide net across various bond types, including corporate and emerging market debt, the Schwab fund sticks strictly to U.S. Treasuries, offering a "flight-to-safety" profile that differs from the broader iShares strategy. This distinction impacts both the risk profile and the potential income generated for investors.
Details
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. 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.