Gyroscopic Investing

Posted: **Thu Apr 10, 2025 2:17 pm**

Both are US long bond ETFs. TLT is priced about 3x per share more than SCHQ. So, for a given Dollar amount, you obviously have to buy about 3x more shares of SCHQ.

They both have 30-day median bid-ask spreads in the same range... 3 basis points for SCHQ, 4 basis points for TLT. Both trade for free at Schwab.

Am I right in thinking that even though I have to buy 3x as many shares of SCHQ that I'd make out the same in terms of total trading cost as I would with TLT? Bid-ask is quoted down only down to the penny, but ETF sales fill to the fractional penny, right?

Now if sales only filled to the nearest penny, that would be a problem, because if I'm always paying $0.01 not matter what, and I'm paying that $0.01 cost 3x as much for SCHQ, then it's not good.

SCHQ expense ratio is 0.03%, for TLT it's 0.15%. Another difference.

**** and... my AI assistant found this ****

"ETF sales typically do not involve fractions of a penny. Prices are rounded to the nearest penny during transactions"

Hmmm... so you get quoted bid-ask never closer than a penny apart, at Schwab you're definitely going to fill at the ask.

Posted: **Thu Apr 10, 2025 8:49 pm**

ochotona wrote: ↑Thu Apr 10, 2025 2:17 pm Both are US long bond ETFs. TLT is priced about 3x per share more than SCHQ. So, for a given Dollar amount, you obviously have to buy about 3x more shares of SCHQ.

They both have 30-day median bid-ask spreads in the same range... 3 basis points for SCHQ, 4 basis points for TLT. Both trade for free at Schwab.

Am I right in thinking that even though I have to buy 3x as many shares of SCHQ that I'd make out the same in terms of total trading cost as I would with TLT? Bid-ask is quoted down only down to the penny, but ETF sales fill to the fractional penny, right?

Now if sales only filled to the nearest penny, that would be a problem, because if I'm always paying $0.01 not matter what, and I'm paying that $0.01 cost 3x as much for SCHQ, then it's not good.

SCHQ expense ratio is 0.03%, for TLT it's 0.15%. Another difference.

**** and... my AI assistant found this ****

"ETF sales typically do not involve fractions of a penny. Prices are rounded to the nearest penny during transactions"

Hmmm... so you get quoted bid-ask never closer than a penny apart, at Schwab you're definitely going to fill at the ask.

Do you "trade" Long Term Treasurys often enough for the bid-ask spread to matter? Yes, I suppose if you are making regular new contributions or reinvesting monthly dividends. I use MF instead of ETF, so it is a moot point - I just receive end of day price. All else being equal, I prefer the cheapest fund, so long time holder of Fidelity's FNBGX at 0.03% ER for LTT allocation, 100% in tax-advantaged accounts, monthly dividends automatically reinvested, and not making regular new contributions - just the infrequent rebalance.

In the case of the ETFs you listed, for every $100K it's an ER difference of $30/year vs. $150/year for almost the same product; so TLT costs an
extra $10/month per $100K. If you are keeping any LTT in taxable, a possible good reason to use at least some TLT would be for tax loss harvesting purposes. It uses a different index vs. the other common LTT ETFs such as SCHQ, VGLT, SPTL - so you can swap TLT out with the others and not violate wash-sale rule.

Posted: **Fri Apr 11, 2025 7:35 am**

18% EDV (Vanguard extended duration treasury) is equivalent to 25% TLT in the PP. Also, EDV has a much longer average duration of 24 years. And only 0.05% expense ratio.

If you use the 18% of EDV, it frees up 7% to use in something else. I liked to use 2% in Bitcoin and then another 5% in SGOV, for a total of 30% in Cash (SGOV)

Posted: **Fri Apr 11, 2025 9:06 am**

Yes, I'm a trader, so it's does matter... I think I better stick to TLT, IEF, instead of SCHQ, SCHR

Posted: **Tue Apr 29, 2025 10:08 am**

Why not just buy individual issues? I try to have as little treasury mutual funds as possible.

Gyroscopic Investing

TLT vs SCHQ - total

TLT vs SCHQ - total

Re: TLT vs SCHQ - total

Re: TLT vs SCHQ - total

Re: TLT vs SCHQ - total

Re: TLT vs SCHQ - total