Treasury Twins: A Contrarian’s Duel Between SCHQ and VGLT

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In the grand circus of finance, where every act claims to be the “best” and every ringmaster wags a finger at your wallet, we find ourselves face-to-face with two Treasury twins: the Schwab Long-Term U.S. Treasury ETF (SCHQ) and the Vanguard Long-Term Treasury ETF (VGLT). Both promise the same old stew-government bonds, low fees, and a dash of stability-but one wears a top hat, the other a crown. Let’s dissect this duet of dullness with the precision of a man who’s never trusted a crowd.

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.

Behold the alchemy of minimalism! Both funds charge the same 0.03% fee, a price so modest it might make a beggar blush. Yet here lies the first whisper of contradiction: VGLT, with its $14.3 billion in assets, struts like a peacock in a henhouse, while SCHQ, with a mere $859 million, clucks contentedly in the corner. Popularity, dear reader, is often a trap for the gullible. Why chase the herd when the underdog might yet surprise?

Performance & risk comparison

Metric SCHQ VGLT
Max drawdown (5 y) -43.01% -43.11%
Growth of $1,000 over 5 years $584 $586

Here’s a tale of two near-identical plunges. Both funds would turn your $1,000 into a slightly less palatable $584-586, a performance so uniform it could be the result of a shared spreadsheet error. But let us not mistake sameness for security. The true contrarian knows that when all boats are sinking in unison, the real treasure lies in questioning why the ocean is flooding at all.

What’s inside

VGLT, the elder statesman of the pair, holds 96 U.S. Treasury securities, its largest bets on notes and bonds with maturities stretching from 10 to 25 years. With $14.3 billion in assets, it’s the kind of fund that could buy a small island and still have change for a cappuccino. Its track record? Nearly 16 years of bureaucratic predictability, like a government form that never expires.

SCHQ, meanwhile, is the younger sibling with 95 holdings, its top allocations on Treasury bonds yielding 4.75% and 4.625%. It’s a mirror image of VGLT, but with the faint scent of rebellion-after all, who needs a $14 billion war chest when you can operate on a shoestring and still look prosperous?

Foolish take

Both ETFs are paragons of prudence, offering the same low fees and government-backed guarantees as a pair of twins arguing over who is more perfect. Yet the contrarian’s gaze lingers on SCHQ, whose smaller size suggests nimbleness in a world where agility is often mistaken for recklessness. VGLT’s scale is a double-edged sword: it offers liquidity but also invites the kind of institutional attention that turns every trade into a bureaucratic ritual.

Consider this: if you were to invest in both, you’d be paying for two versions of the same story. But if you must choose, SCHQ’s underdog status is a subtle nod to the contrarian ethos. After all, what is the stock market if not a stage for the masses to cheer at the obvious, while the quiet ones pocket the gains?

Glossary

ETF (Exchange-Traded Fund): A financial sorcerer’s stone, transforming baskets of bonds or stocks into a single, tradeable spell.
Expense ratio: The annual toll collected by the fund’s keepers, measured in percentages and patience.
Dividend yield: A polite suggestion from your investments to spend your evenings counting pennies instead of hours.
Beta: A number that tells you how much your portfolio will wiggle while you sleep, if you sleep at all.
AUM (Assets Under Management): The weight of the fund’s ego, measured in billions and bravado.
Max drawdown: The moment your portfolio decides to moonwalk, leaving you clutching your hat.
Maturity: The point at which your bond’s promise turns from gold to lead-or vice versa.
Yield: The whisper of income, barely loud enough to drown out the silence of inflation.
Securities: Financial instruments, or the tools of our modern-day alchemists.
Track record: The footprints left by a fund’s journey, whether toward glory or oblivion.
Holdings: The treasures-or perhaps the traps-hidden in a fund’s vault.
Government-backed: A guarantee so ironclad it could rust your sense of adventure.

And there you have it, dear reader: a duel between two near-identical twins, where the only difference is who wins the crowd’s applause. But then again, the contrarian never needed applause. They just needed the market to forget them. 😏

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2025-11-09 17:18