SCHO ETF

Short-term treasury ETFs like Schwab Short-Term U.S. Treasury ETF offer respectable interest rates and tax advantages, but SCHO's duration and share price are drawbacks. SCHO's average maturity of two years leads to moderate price volatility, which is undesirable for a cash replacement strategy. The recent two-for-one share split by Charles Schwab could potentially increase the effective bid-ask spread, making frequent trading costlier and less attractive.

The Schwab Short-Term U.S. Treasury ETF (SCHO) offers a 4.3% yield, charges just a 0.03% management fee, and has high liquidity, making it ideal for parking some short-term cash. Current equity markets appear expensive with high forward P/E ratios. There are signs of speculative assets reaching bubble territory. SCHO provides a safer alternative to equities, reducing portfolio volatility and offering potential capital appreciation if interest rates decline as expected.

SCHO presently offers investors a Dividend Yield [TTM] of 4.16%, indicating that it can help you generate income. The ETF's low annualized volatility of 1.93% indicates that you can significantly reduce portfolio volatility by adding it to your portfolio. I have added additional positions of SCHO to The Dividend Income Accelerator Portfolio, in which it now represents 9.43% of the overall portfolio, contributing significantly to a reduced portfolio volatility.

Schwab Short-Term U.S. Treasury ETF is trading near its all-time low. SCHO offers a yield of 4.14% and potential for small capital gains if interest rates drop. An extremely low expense ratio and low volatility make this an attractive and safe ETF for income.