ILTB vs SCHZ

ILTBAiShares Core 10+ Year USD Bond ETF

SCHZASchwab U.S. Aggregate Bond ETF

In short

ILTB Take the whole U.S. bond market and keep only the long end. ILTB tracks a Bloomberg index of dollar bonds maturing in 10+ years, investment grade and high yield alike, for six basis points.

SCHZ Schwab's core bond holding: the broad U.S. investment-grade bond market, over 10,000 issues deep, for 0.03% a year. That is the floor of a category whose median fee is more than ten times higher. Running since 2011, pays monthly.

Stated mandate

ILTB The fund seeks to track an index of U.S.-dollar-denominated investment-grade and high-yield bonds with remaining maturities above ten years.

SCHZ The fund seeks to track the total return of an index representing the broad U.S. investment-grade bond market.

Why people hold it

• ILTB Costs 0.06% a year, a fraction of the typical fund in its broad-bond peer group, where the median is 0.36%.
• One ticker for the long maturity slice of the U.S. bond market: Treasuries, corporates and high yield, all 10+ years, via the Bloomberg U.S. Universal 10+ Year Index.
• Pays monthly and has been running since 2009, through several full rate cycles.
• Broad holdings and low fees put it in the top quartile of its 187-fund bond cohort on our review.

• SCHZ 0.03% a year sits at the category floor, against a cohort median of 0.36%. Only a short list of aggregate-bond funds matches it, including AGG, BND and SPAB.
• Tracks the Bloomberg US Aggregate Bond Index tightly, one of the cleanest index implementations among the 187 funds in its peer group.schwabassetmanagement.com
• One ticker, thousands of investment-grade U.S. bonds, income paid monthly. The plumbing of a bond portfolio without buying a single bond yourself.
• Live since 2011 and now a multi-billion-dollar fund that trades actively, so trading costs on ordinary retail-sized orders tend to be minor.

Worth knowing

• ILTB Long bonds only means outsized sensitivity to interest rates. Expect much bigger price swings than an aggregate fund like BND or SPAB.
• The index reaches past investment grade into high yield, so credit risk rides along with the duration.
• Moderately traded rather than a volume giant. Limit orders are the sane default.

• SCHZ This is duration exposure, not a cash substitute. Interest-rate moves, not credit selection, drive most of the ride, and that is the weakest part of its risk profile.
• Investment grade and U.S. only: no high-yield, no foreign bonds. Funds like BNDX cover the international side of the cohort.
• The aggregate-bond aisle is commoditized. Against AGG, BND and SPAB at the same 0.03%, the differences come down to index variant and where you already custody, not fee.

Full ILTB profile⁠

Full SCHZ profile⁠