SCHO Profile
The Schwab Short-Term U.S. Treasury ETF is designed to provide investors with exposure to U.S. Treasury securities that have short-term maturities. The fund aims to invest at least 90% of its net assets, including any borrowings for investment purposes, in securities that are components of the underlying index. This index is specifically comprised of publicly-issued U.S. Treasury securities with remaining maturities ranging from one year to less than three years.
The index includes only securities that meet stringent criteria: they must be rated investment grade, have a minimum outstanding face value of $300 million, and be denominated in U.S. dollars. Furthermore, these securities must be fixed-rate and non-convertible, ensuring stability and predictability in the fund’s income stream. This focus on short-term Treasury securities aims to minimize interest rate risk and provide investors with relatively stable returns.
Schwab’s management strategy for the fund involves regular rebalancing to ensure that the portfolio accurately reflects the composition of the index. The ETF's investment process includes meticulous selection of U.S. Treasury securities that meet the defined criteria, thus offering investors a low-risk option with minimal credit risk due to the backing by the U.S. government.
By concentrating on short-term Treasury securities, the Schwab Short-Term U.S. Treasury ETF seeks to offer a conservative investment choice with a focus on capital preservation and liquidity. This makes it suitable for investors seeking to preserve their capital while earning a modest yield, particularly in environments where interest rates are rising or where stability is a priority. The fund’s design helps mitigate the impact of long-term interest rate fluctuations, aligning with conservative investment strategies.
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