The Vanguard Long-Term Treasury ETF (NASDAQ:VGLT) and the Schwab Long-Term U.S. Treasury ETF (NYSEMKT:SCHQ) provide near-identical exposure to long-duration government debt with matching expense ratios and performance profiles.
Both the Vanguard fund and the Schwab fund target the long end of the U.S. Treasury curve, allowing investors to hedge against falling interest rates or broader economic volatility. These funds focus on bonds with at least 10 years until maturity, which makes them highly sensitive to interest rate shifts.
Snapshot (cost & size)
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Both ETFs are highly efficient, sharing a low 0.03% expense ratio. While they track similar portfolios, the Schwab fund offers a slightly higher yield of 4.9% compared to 4.8% for the Vanguard fund, reflecting minor differences in their specific bond selections.
Performance & risk comparison
What’s inside
Vanguard Long-Term Treasury ETF targets significant and steady current income by investing in government debt with maturities spanning 10 to 25 years. This concentration in the long end of the yield curve makes the fund particularly sensitive to interest rate changes. It currently holds 102 positions and was launched in 2009. Vanguard Long-Term Treasury ETF has paid $2.52 per share over the trailing 12 months, which on its recent ~$53.05 share price works out to a 4.8% yield.
Schwab Long-Term U.S. Treasury ETF focuses on mirroring a benchmark index that tracks the performance of the long-duration segment of the U.S. Treasury bond market. The portfolio contains 100 holdings and consists of debt backed by the full faith and credit of the federal government, often providing a hedge against equity market downturns. It was launched in 2019. Schwab Long-Term U.S. Treasury ETF has paid $1.47 per share over the trailing 12 months, which on its recent ~$30.10 share price works out to a 4.9% yield.
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Which looks like the better buy
Long-term U.S. Treasury bonds have had a brutal few years. When the Federal Reserve raised interest rates at the fastest pace in decades to fight inflation, long-duration bonds took the full force of that shift. Funds like VGLT and SCHQ lost roughly a third of their value from peak to trough, a reminder that government-backed does not mean risk-free. The risk in these funds is not that the government will fail to pay, but that rising rates make existing bonds worth less in the market.
That context matters before choosing between these two funds, because in almost every other respect, they are the same investment. Both track the identical index, hold the same bonds, charge the same fee, and have delivered returns separated by a rounding error over every measured time period. Their correlation is essentially perfect.
VGLT manages roughly 13 times the assets of SCHQ, giving it deeper liquidity and a longer institutional track record dating back to 2009. For most investors, that scale and history make VGLT the more dependable default. SCHQ is an equally sound alternative for Schwab platform investors who prefer to keep their holdings in one place.
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Vanguard’s VGLT or Schwab’s SCHQ: Which Long-Term Treasury ETF Is the Better Buy? was originally published by The Motley Fool
