Better U.S. Treasury ETF: Schwab Long-Term U.S. Treasury vs. Vanguard Long-Term Treasury
Key Points
The Vanguard Long-Term Treasury ETF and Schwab Long-Term U.S. Treasury ETF both focus holdings on long-term U.S. Treasuries.
The two ETFs sport similarities in expense ratios and returns over time.
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Both the Schwab Long-Term U.S. Treasury ETF (NYSEMKT:SCHQ) and the Vanguard Long-Term Treasury ETF (NASDAQ:VGLT) aim to track the performance of long-term U.S. Treasury bonds, appealing to investors seeking interest rate sensitivity and government-backed stability.
This comparison unpacks their similarities and subtle distinctions to help clarify which may align better with specific priorities.
Snapshot (cost & size)
| Metric | SCHQ | VGLT |
|---|---|---|
| Issuer | Schwab | Vanguard |
| Expense ratio | 0.03% | 0.03% |
| 1-yr return (as of 2025-10-20) | 2.70% | 2.73% |
| Dividend yield | 4.5% | 4.4% |
| Beta | 0.52 | 0.52 |
| AUM | $859.0 million | $14.3 billion |
Beta measures price volatility relative to the S&P 500; figures use five-year weekly returns.
Both funds carry an identical expense ratio of 0.03% (as of October 27, 2025), making them very affordable. SCHQ offers a marginally higher dividend yield, while VGLT's yield is nearly identical, so income-focused investors may not see a significant difference on this front.
Performance & risk comparison
| Metric | SCHQ | VGLT |
|---|---|---|
| Max drawdown (5 y) | -43.01% | -43.11% |
| Growth of $1,000 over 5 years | $584 | $586 |
What's inside
VGLT invests in U.S. Treasury bonds with maturities ranging from 10 to 25 years. It holds 96 securities with top positions in United States Treasury notes/bonds. With nearly 16 years under its belt, it offers a long track record and substantial scale, with $14.3 billion in assets under management (AUM) as of October 28, 2025.
By contrast, SCHQ also focuses entirely on long-term U.S. Treasury bonds, with 95 holdings. Its largest allocations are U.S. Treasury bonds 4.75%, and U.S. Treasury bonds 4.625%. It mirrors the same government-backed purity and simplicity.
For more guidance on ETF investing, check out the full guide at this link.
Foolish take
Both the Vanguard Long-Term Treasury ETF and Schwab Long-Term U.S. Treasury ETF are solid investment vehicles for those seeking exposure to long-term U.S. Treasuries. A key appeal of both ETFs is their low expense ratios, which directly translates into more returns for investors over time.
VGLT benefits from a significantly larger asset base. This substantial size can lead to higher liquidity, making it easier for investors to buy and sell shares. A larger asset base can also provide economies of scale, further contributing to the ETF's ability to maintain low operating costs.
On the other hand, SCHQ presents a competitive alternative. It offers a comparable cost structure, and has demonstrated a similar return profile over time. While SCHQ may have a smaller asset base than VGLT, its strong performance and cost-effectiveness make it attractive for investors looking to diversify their ETF providers.
Ultimately, both VGLT and SCHQ serve as effective tools for investors aiming to capture the stability and potential income generation of long-term U.S. government bonds. The choice between them often comes down to individual preferences regarding fund size, specific brokerage platforms, and financial goals.
Glossary
ETF (Exchange-Traded Fund): An investment fund traded on stock exchanges, holding a basket of assets like stocks or bonds.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges to cover operating costs.
Dividend yield: The annual dividend income expressed as a percentage of the investment's current price.
Beta: A measure of an investment's volatility compared to the overall market, typically the S&P 500.
AUM (Assets Under Management): The total market value of assets that a fund manages on behalf of investors.
Max drawdown: The largest percentage drop from a fund's peak value to its lowest point over a specific period.
Maturity: The length of time until a bond's principal is repaid to investors.
Yield: The income return on an investment, usually expressed as an annual percentage.
Securities: Financial instruments, such as stocks or bonds, that can be traded in financial markets.
Track record: The historical performance record of a fund or investment over time.
Holdings: The individual securities or assets owned within a fund or portfolio.
Government-backed: Supported or guaranteed by the government, reducing credit risk for investors.
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Robert Izquierdo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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