Schwab 1-5 Year Corporate Bond ETF (SCHJ)

ETF Schwab 1-5 Year Corporate Bond ETF (SCHR)

Profile:

ETF Schwab 1-5 Year Corporate Bond ETF (SCHR) is a passively managed exchange-traded fund (ETF) that seeks to track the performance of the Bloomberg Barclays U.S. 1-5 Year Corporate Bond Index. The ETF invests primarily in investment-grade corporate bonds with maturities of 1 to 5 years.

Objective:

The primary investment goal of SCHR is to provide investors with exposure to the U.S. corporate bond market with a focus on shorter-term maturities. This strategy aims to offer a relatively low-risk and stable source of income with moderate potential for capital appreciation.

Issuer:

Charles Schwab & Co., Inc. is the issuer of SCHR.

• Reputation and Reliability: Charles Schwab is a well-respected and established financial institution with a long history of providing investment products and services.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in fixed income investing.

Market Share:

SCHR is one of the largest ETFs in the short-term corporate bond category, with a market share of approximately 15%.

Total Net Assets:

As of October 27, 2023, SCHR has total net assets of over $16 billion.

Moat:

• Low-cost: SCHR has a low expense ratio of 0.03%, making it one of the most affordable ETFs in its category.
• Diversification: The ETF invests in a broad range of corporate bonds, which helps to reduce risk.
• Liquidity: SCHR is a highly liquid ETF with an average daily trading volume of over 2 million shares.

Financial Performance:

• Historical Performance: Over the past 5 years, SCHR has delivered an annualized return of 2.5%.
• Benchmark Comparison: SCHR has outperformed its benchmark index, the Bloomberg Barclays U.S. 1-5 Year Corporate Bond Index, over the past 5 years.

Growth Trajectory:

The demand for short-term corporate bond ETFs is expected to grow in the coming years as investors seek low-risk and stable income sources.

Liquidity:

• Average Trading Volume: SCHR has an average daily trading volume of over 2 million shares, making it a highly liquid ETF.
• Bid-Ask Spread: The bid-ask spread is typically very tight, indicating low transaction costs.

Market Dynamics:

• Interest Rate Environment: The performance of SCHR is sensitive to changes in interest rates. Rising interest rates can lead to lower bond prices.
• Credit Risk: The ETF invests in corporate bonds, which carry some level of credit risk.
• Economic Growth: A strong economy can lead to higher corporate profits and improve the creditworthiness of companies.

Competitors:

• iShares Aaa-A Rated 0-5 Year Corp Bond ETF (QLTA)
• SPDR Bloomberg Barclays Short Term Corporate Bond ETF (SCPB)
• Vanguard Short-Term Corporate Bond ETF (VCSH)

Expense Ratio:

The expense ratio for SCHR is 0.03%.

Investment approach and strategy:

• Strategy: SCHR tracks the Bloomberg Barclays U.S. 1-5 Year Corporate Bond Index.
• Composition: The ETF invests in investment-grade corporate bonds with maturities of 1 to 5 years.

Key Points:

• Low-cost ETF with a diversified portfolio of short-term corporate bonds.
• Strong track record of outperforming its benchmark index.
• Highly liquid with low transaction costs.

Risks:

• Interest rate risk: Rising interest rates can lead to lower bond prices.
• Credit risk: The ETF invests in corporate bonds, which carry some level of credit risk.
• Market risk: The value of the ETF can fluctuate due to market conditions.

Who Should Consider Investing:

• Investors seeking a low-risk and stable source of income.
• Investors with a short-term investment horizon.
• Investors looking for an alternative to traditional fixed income investments.

Fundamental Rating Based on AI:

Based on an AI-based analysis of SCHR's fundamentals, including financial performance, market position, and future prospects, the ETF receives a rating of 8 out of 10.

Resources and Disclaimers:

• Charles Schwab & Co., Inc.: https://www.schwab.com/
• Bloomberg Barclays Indices: https://www.bloomberg.com/professional/solution/bloomberg-barclays-indices/
• ETF Database: https://etfdb.com/etf/SCHR/

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult a qualified financial advisor before making any investment decisions.