LQD vs. SCHQ: Why the "Safer" Bond Fund Has Not Always Been the Better Choice
Key takeaways
- LQD ^GSPC Investors choosing between i Shares i Boxx $ Investment Grade Corporate Bond ETF (NYSEMKT:LQD) and Schwab Long-Term U.S.
- Each carries different risks regarding credit quality and interest rate sensitivity in changing economic environments.
- Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns.
LQD ^GSPC Investors choosing between i Shares i Boxx $ Investment Grade Corporate Bond ETF (NYSEMKT:LQD) and Schwab Long-Term U.S. Treasury ETF (NYSEMKT:SCHQ) must weigh lower costs and Treasury safety against the higher returns of corporate credit.
These two funds provide distinct paths for fixed-income exposure, helping investors balance yield and safety. the i Shares fund targets a broad basket of investment-grade corporate bonds, while the Schwab fund focuses exclusively on the long end of the U.S. Treasury market. Each carries different risks regarding credit quality and interest rate sensitivity in changing economic environments.
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.