SCHJ Profile
The Schwab 1-5 Year Corporate Bond ETF aims to provide investors with exposure to a diversified portfolio of U.S. investment-grade corporate bonds with relatively short maturities. The fund tracks an index that includes taxable corporate bonds issued by U.S. corporations with maturities ranging from one to five years. The index is designed to reflect the performance of high-quality, short-term corporate debt, offering a balance between yield and interest rate risk.
The underlying index specifically targets bonds with an outstanding face value of $300 million or more, ensuring sufficient liquidity and market depth for the securities included. By focusing on investment-grade bonds, the ETF selects debt issued by companies with strong credit ratings, thus aiming to minimize default risk while providing steady income. This focus on short-term maturities helps limit interest rate risk compared to longer-duration bonds, making the ETF suitable for investors seeking stability and lower volatility in their fixed-income investments.
In line with its investment strategy, the Schwab 1-5 Year Corporate Bond ETF commits to investing at least 90% of its net assets in securities that are part of the index. This policy ensures that the fund remains closely aligned with the index's performance and maintains its focus on high-quality, short-term corporate bonds. The ETF’s diversified approach across various corporate issuers helps spread credit risk while capturing income from the underlying bonds.
Investors in the Schwab 1-5 Year Corporate Bond ETF benefit from exposure to a broad array of investment-grade corporate bonds with relatively short durations. This exposure provides a way to access higher yields compared to government securities while managing interest rate risk through the selection of bonds with shorter maturities. The fund’s emphasis on investment-grade securities and short-term debt positions it as a prudent choice for those seeking reliable income and reduced exposure to interest rate fluctuations.
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