SCHO: The Case For Rotating Out Of Short-Duration Treasuries

  • SCHO offers stability and low costs but faces yield curve headwinds, making it less attractive than ultrashort or long-duration Treasuries for income. The Fed is expected to cut rates later in 2025, which could favor long-duration Treasuries over short-term strategies like SCHO for higher yields. SCHO's recent distribution declines and moderate yield highlight its limited income potential compared to long-duration alternatives, such as SCHQ.