Better Bond ETF: Schwab's SCHQ vs. State Street's SPLB
Key Points
SPLB and SCHQ both offer ultra-low fees, but SPLB delivers a higher dividend yield and stronger recent total returns.
SCHQ holds fewer bonds and tilts entirely toward Treasuries, while SPLB focuses on investment-grade corporate bonds with much broader diversification.
SCHQ has seen a deeper five-year drawdown, with a maximum drawdown of -40.95% compared to SPLB's -34.49%.
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The State Street SPDR Portfolio Long Term Corporate Bond ETF (NYSEMKT:SPLB) and Schwab Long-Term U.S. Treasury ETF (NYSEMKT:SCHQ) both keep expenses minimal, but SPLB provides a higher yield, more diversified bond exposure, and has outperformed SCHQ in one-year returns.
Both SPLB and SCHQ target long-duration U.S. bonds, but their portfolios differ significantly. SPLB invests in hundreds of investment-grade corporate bonds, while SCHQ focuses entirely on U.S. Treasury debt. This comparison looks at cost, yield, performance, risk, and portfolio details to help investors weigh which fund may better suit their needs.
Snapshot (cost & size)
| Metric | SPLB | SCHQ |
|---|---|---|
| Issuer | SPDR | Schwab |
| Expense ratio | 0.04% | 0.03% |
| 1-yr return (as of 2026-04-15) | 7.56% | 3.02% |
| Dividend yield | 5.38% | 4.63% |
| Beta | 0.67 | 0.53 |
| AUM | $1.34 billion | $895.84 million |
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.
SCHQ is slightly more affordable on fees, charging just 0.03% annually versus SPLB’s 0.04%, but SPLB’s higher yield (5.4% vs. 4.6%) could appeal to income-seeking investors who want stronger payouts from their bond allocation.
Performance & risk comparison
| Metric | SPLB | SCHQ |
|---|---|---|
| Max drawdown (5 y) | -34.49% | -40.95% |
| Growth of $1,000 over 5 years | $926 | $774 |
What's inside
SCHQ aims to replicate the long-term U.S. Treasury bond market, holding just 98 individual securities with a heavy weighting (91%) in government debt. The fund is 6.5 years old and its largest holdings are Treasury bond issues, reflecting its pure-play government focus.
By contrast, SPLB tracks the Bloomberg Long U.S. Corporate Index, offering exposure to over 3,000 investment-grade corporate bonds across major sectors. Top positions include Amazon.com Unsecured 03/76 6.05%, Anheuser Busch Company 02/46 4.9%, and CVS Health Unsecured 03/48 5.05%. SPLB’s broader scope means it captures more credit risk, but also provides greater issuer diversification than SCHQ. Neither fund uses leverage or has notable structural quirks.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Bonds are an important part of an investment portfolio, providing diversification and a counterbalance to stocks. The State Street SPDR Portfolio Long Term Corporate Bond ETF (SPLB) and Schwab Long-Term U.S. Treasury ETF (SCHQ) are two long-duration bond funds to consider. Choosing between them comes down to individual investor goals.
SCHQ delivers maximum safety through its focus on U.S. Treasuries, which offers a hedge against a stock market downturn. If your primary objective is capital preservation, this ETF is the better choice over SPLB. However, the trade-off is reduced income, as demonstrated by its lower dividend yield and one-year return.
SPLB is only slightly more expensive, but investors get a robust dividend yield, far larger assets under management of $1.3 billion, and stronger one-year returns. But because the fund targets corporate bonds, it holds higher risk than SCHQ. If your top goal is income generation, then SPLB is the better ETF choice.
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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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