Better U.S. Treasury ETF: Schwab Long-Term U.S. Treasury vs. Vanguard Long-Term Treasury

The Schwab Long-Term U.S. Treasury ETF (SCHQ) and Vanguard Long-Term Treasury ETF (VGLT) both track long-term U.S. Treasury bonds, offering investors similar low expense ratios of 0.03% and comparable performance. While VGLT boasts a significantly larger asset base of $14.3 billion, potentially indicating higher liquidity and economies of scale, SCHQ remains a competitive alternative with a similar cost structure and return profile despite its smaller $859 million AUM. Both ETFs are presented as effective tools for investors seeking stability and income from U.S. government bonds, with the choice often depending on individual preferences for fund size or specific brokerage platforms.

Analysis

The Schwab Long-Term U.S. Treasury ETF (SCHQ) and Vanguard Long-Term Treasury ETF (VGLT) offer nearly identical exposure to long-term U.S. Treasury bonds, targeting interest rate sensitivity and government-backed stability. Both ETFs feature a competitive 0.03% expense ratio, with comparable one-year returns (SCHQ 2.70%, VGLT 2.73% as of Oct 20, 2025) and similar dividend yields (SCHQ 4.5%, VGLT 4.4%).

A primary distinction is Assets Under Management (AUM): VGLT holds $14.3 billion, significantly more than SCHQ's $859.0 million as of October 28, 2025. VGLT's larger scale suggests higher liquidity and greater economies of scale, also benefiting from its nearly 16-year track record.

Despite the AUM difference, both ETFs exhibit a similar five-year risk and return profile. Maximum drawdowns were -43.01% for SCHQ and -43.11% for VGLT, with $1,000 growing to $584 and $586 respectively. Both also share an identical beta of 0.52.

Ultimately, while VGLT's larger asset base and history may appeal, SCHQ offers a competitive alternative with comparable cost and performance. The choice between these products largely depends on individual investor preferences for fund size, brokerage platforms, and financial objectives, given their fundamental similarities.

Key Decisions for Investors

• Investors seeking long-term U.S. Treasury exposure should consider both SCHQ and VGLT due to their identical low expense ratios and comparable performance
• Evaluate VGLT's significantly larger $14.3 billion AUM for potential benefits in liquidity and economies of scale
• Consider SCHQ as a competitive alternative for portfolio diversification or if aligned with specific brokerage platforms and individual fund size preferences