The Schwab 5-10 Year Corporate Bond ETF (NYSE ARCA:SCHI) aims to track the performance of a specific segment of the corporate bond market. To achieve this, the fund typically invests in a diversified portfolio of securities that are part of a carefully selected index.
This index focuses on U.S. investment-grade, taxable corporate bonds with maturities ranging from five to ten years. These bonds must have a minimum outstanding face value of $300 million, ensuring a certain level of liquidity and stability. By targeting this specific segment, the fund seeks to provide investors with a targeted exposure to the corporate bond market.
In terms of its investment strategy, the fund has a clear policy: under normal market conditions, it will allocate at least 90% of its net assets to securities that are included in the index. This approach allows the fund to closely track the performance of the underlying index, providing investors with a reliable and transparent investment solution.