SCHI Profile
The Schwab 5-10 Year Corporate Bond ETF aims to provide investment returns that closely correspond to the performance of the Bloomberg U.S. 5-10 Year Corporate Bond Index. This index is specifically designed to measure the performance of investment-grade, taxable corporate bonds issued by U.S. companies. The bonds included in the index have maturities ranging from five to ten years and must have an outstanding face value of at least $300 million, ensuring a focus on relatively stable, mid-term debt instruments.
To achieve its investment objective, the fund generally invests at least 90% of its net assets, including any borrowings used for investment purposes, in securities that are part of the Bloomberg U.S. 5-10 Year Corporate Bond Index. This approach provides investors with a targeted exposure to a diversified portfolio of corporate bonds that fall within the specified maturity range. The fund’s holdings primarily consist of high-quality bonds issued by major U.S. corporations, selected for their investment-grade ratings, which denote a relatively low risk of default.
The Schwab 5-10 Year Corporate Bond ETF is designed to appeal to investors seeking a balance between income generation and risk management. The fund’s focus on bonds with maturities between five and ten years allows it to capture a segment of the bond market that typically offers a higher yield compared to shorter-duration bonds, while maintaining lower interest rate risk compared to longer-duration bonds. This maturity range also helps to mitigate some of the risks associated with interest rate fluctuations and credit events.
Investors in the Schwab 5-10 Year Corporate Bond ETF benefit from a diversified bond portfolio that reflects the broader corporate bond market, including a variety of sectors and industries. By focusing on investment-grade bonds, the fund aims to provide a relatively stable income stream while minimizing credit risk. The ETF’s investment strategy is geared towards offering a consistent return profile that aligns with the performance of the corporate bond market segment it tracks, making it a suitable option for investors looking to add fixed-income exposure to their investment portfolios.
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