<2> LQD Offers Broader Bond Exposure Than SCHQ
<3> Introduction
LQD and SCHQ are two popular exchange-traded funds (ETFs) that offer investors exposure to the investment-grade bond market. While both funds have their own unique characteristics, a closer look at their holdings and performance reveals that LQD offers broader bond exposure than SCHQ.
<3> LQD’s Broader Bond Exposure
LQD, which is managed by VanEck, tracks the Bloomberg Barclays US Investment Grade Corporate Bond Index. This index includes a wide range of investment-grade corporate bonds, with a minimum market capitalization of $500 million and a maximum maturity of 25 years. As of the latest available data, LQD’s holdings include over 1,000 individual bonds from more than 200 issuers.
In contrast, SCHQ, which is managed by Schwab, tracks the Bloomberg Barclays US Aggregate Float Adjusted 1-5 Year Corporate Bond Index. This index is more narrowly focused on investment-grade corporate bonds with a maximum maturity of 5 years. As of the latest available data, SCHQ’s holdings include around 300 individual bonds from fewer than 100 issuers.
<3> Comparison of Holdings
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