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Treasury ETF (SCHO) Hits New 52-Week High

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For investors seeking momentum, Schwab Short-Term U.S. Treasury ETF (SCHO - Free Report) is probably on radar now. The fund just hit a 52-week high, and is up 1.2% from its 52-week low price of $49.42/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

SCHO in Focus    

SCHO targets the short end of the yield curve, holding 102 bonds in its basket. It has a weighted average maturity of 2 years and effective duration of 1.9 years. It is one of the popular and liquid ETFs in the Treasury space with AUM of over $4.8 billion and average daily volume of around 830,000 shares. The product charges 6 bps in annual fees and has 2.51% in 30-day SEC yield (see: all the Government Bond ETFs here).

Why the Move?

The Treasury corner of the fixed income world has been an area to watch lately given a dovish Fed. The central bank holds interest rates steady in the latest FOMC meeting and signals patience on future interest rate hikes.

More Gains Ahead?

Currently, SCHO has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook, suggesting that the fund might not continue its outperformance in the months ahead. However, a low weighted alpha of 0.80% and a low 20-day volatility of 1.53% of 1.53% shows that there is definitely still some promise for risk-aggressive investors, who want to ride on this surging ETF.

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