Both the Vanguard Long-Term Treasury ETF (NASDAQ:VGLT) and the Schwab Long-Term U.S. Treasury ETF (NYSEMKT:SCHQ) offer near-elimination exposure to long-duration U.S. Treasury securities, sharing identical expense ratios and performance characteristics. Their portfolios focus on bonds maturing in 10+ years, making them vulnerable to interest rate fluctuations.
Due to their long-duration holdings, these funds act as interest rate hedges. When rates rise, bond prices typically fall, and vice versa. Both products provide diversification away from equities during market turbulence, though they carry inherent duration risk.
Snapshot: Cost and Assets Under Management
Both ETFs charge a 0.03% expense ratio. VGLT maintains a larger asset base (13x SCHQ) with a longer operational history since 2009, while SCHQ offers a marginally higher yield due to portfolio composition differences.
Performance and Risk Characteristics
VGLT invests in fixed-income instruments with 10-25 year maturities, currently yielding 4.8%. SCHQ mirrors a benchmark index tracking long-term treasury contracts, delivering 4.9% in trailing 12-month distributions. Both funds hold government-backed securities, eliminating credit risk but retaining interest rate sensitivity.
Portfolio Composition
VGLT manages 102 holdings as of its latest update, while SCHQ consists of 100 positions. Both portfolios are confined to U.S. Treasury debt obligations guaranteed by federal credit.
Investment Decision Factors
Given their structural similarity, choice factors become practical: VGLT offers broader liquidity for institutional-sized trades or those preferring established funds, while SCHQ appeals to Schwab ecosystem users seeking platform consolidation.
Current Market Considerations
Recent interest rate hikes have impacted these funds similarly. While past performance shows frequent parity, long-term investors should evaluate their risk tolerance regarding bond market volatility.